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Over a quarter of consumers want a more affordable approach to debt repayment from banks and credit lenders

by Staff GBAF Publications Ltd
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New research from Sopra Steria shows greater flexibility in the debt management industry is necessary as consumer fears grow over the rising cost of living

Sopra Steria, the purpose-led digital transformation expert, today released findings from its report: How creditors can deliver unrivalled customer experience (CX) to consumers in vulnerable situations, highlighting that consumers are demanding increased flexibility when it comes to loan repayments amidst the UK’s turbulent economic landscape.

With rising energy bills, increasing inflation, and trailing wages making the cost of living more expensive, over 1 in 4 (27%) UK respondents said they’d like creditors and banks to take a more flexible approach to debt management, allowing repayments to vary each month depending on affordability and demand.

Most (79%) said they would also value the ability to spread the cost of any missed payments throughout the year, to avoid having to pay out large sums of money in one go. This shift in consumer expectation mirrors that of regulatory authorities, which have similarly called for greater flexibility and visibility within the debt journey, as per the FCA’s introduction of consumer duty.

As consumers continue to feel the pinch, three quarters (76%) have said they would welcome some level of financial support and guidance from banks and building societies, with over a third (38%) stating they have never experienced personalised services from a financial institution.

Alongside this, 59% of individuals who have been in financial difficulty in the last 5 years agreed their bank hadn’t shown them any compassion. These findings prove that financial organisations must begin to personalise their services and use profile and behavioural data to better identify and guide vulnerable customers. Doing so, in a way which is compassionate, will help many customers through this new period of uncertainty they find themselves in.

Craig Wilson, MD of Private Sector for Sopra Steria said:

“As the cost of living continues to spiral, it is no surprise the number of vulnerable or low-income families across the UK is rising, with many turning to personal debt and credit to pay bills. Our report shows just how paramount it is to customers that the institutions which offer them financial support are flexible in their approaches, especially during this time of great turbulence.

“There needs to be a turning point, starting with increased understanding of vulnerability and the improvement of services to enable people to better budget and plan their financial lives. Alongside this, the use of data (with permission) to provide valuable advice and guidance to those in vulnerable positions will be vital to ensuring good outcomes for customers and much needed change within the debt management industry.”