To take the nation’s financial pulse, we must go digital

Director of Product, Pete Bulley, recently shared his view with Global Banking and Finance Review. Here are our highlights.

The challenge for lenders

‘The last six months have brought the precarious financial situation of many millions across the world into sharper focus than ever before.’

But while the figures may be unprecedented, the underlying problem is not a new one — and it requires serious attention as well as action from lenders to solve it.

Research commissioned by Aire in February found that eight out of ten adults in the UK would be unable to cover essential monthly spending should their income drop by 20%. Since then, Covid-19 has increased the number without employment by 730,000 people between July and March, and saw 9.6 million furloughed as part of the job retention scheme.

The pressure is growing for lenders with no clear return to normal in sight.

Embedding digital further

While digital moves higher up the agenda for lenders as a result of the pandemic, many still haven’t got their customer support properly in place to meet demand.

We see digital usually prioritised by lenders at acquisition, with customer management neglected in favour of getting new customers through the door.

Once inside, even the most established of lenders are likely to fall back on manual processes, both heavy on resource and on time.

Lenders are also grappling with regulation. While many recognise the moral responsibility they have for their customers, they are still blind to the new tools available to help them act effectively and at scale.

Placing the consumer at the heart of the response

If the opportunity lies in gathering information directly from the consumer — the solution rests with first-party data.

The answer lies in better, and more scalable, personalised support. But to do this, lenders need rich, real-time insight so they can act effectively, as the regulator demands. It needs to be done at scale and it needs to be done with the consumer experience in mind, with convenience and trust high on the agenda.

With the right product behind it, this can be achieved seamlessly and at scale by lenders. Pulse from Aire provides a link delivered by SMS or email to customers, encouraging them to engage with Aire’s Interactive Virtual Interview (IVI). The information, gathered from the consumer, is then validated by Aire to provide the genuinely holistic view of a consumer that lenders require, delivering insights that include risk of financial difficulty, validated disposable income and a measure of engagement.

No lengthy or intrusive phone calls. No manual outreach or large call centre requirements. And best of all, lenders can get started in just days and they save up to £60 a customer.

The right technology at the right time

What is clear is that in Covid-19, and the resulting financial shockwaves, lenders face an unprecedented challenge in customer management. In innovative new data in the form of first-party data, they may just have an unprecedented solution.

The full article was originally published by Global Banking and Finance Review in October 2020.

First-party data is finally shifting the power balance in credit decisioning towards the consumer — find out how you stand to benefit here.