With inflation rates hitting record levels worldwide, there’s no doubt we are entering a global cost of living crisis.
A recent report noted that the highest recorded global inflation of the past decade took place in 2008 when the inflation rate was approximately 6.4% compared to the previous year. As of July 2022, the U.S. and the U.K. are seeing 40-year record level highs with rates in both regions at 9.1%.
Specifically in the U.K., the Bank of England forecast predicts that the inflation rate will hit 11% by the end of 2022.
With the cost of goods and services being high, we know this is going to affect consumers, but how is this going to affect organizations, particularly ones within the Banking & Finance industry?
While there will be many areas of impact, let’s focus on four key areas and how organizations in the banking and finance industry can prepare and avoid negative impact.
Customers Will Be Overwhelmed. Organizations Need to Be Proactive.
Research has shown that 66% of financial organization customers want their bank to identify advanced signs of financial stress and respond with solutions and advice. We know not all customers are the same, therefore their circumstances are not the same.
Some customers may not have the means to pay back their financial debts on time and in full, while others may have the means but need reminders.
Financial organizations need to be able to distinguish these customers from one another. This allows organizations to deflect pre-delinquency customers away from collections.
For example, customers that need reminders and have money available to make payments can avoid late payments or being sent to collections if they receive a reminder a few days before their balance is due.
Another scenario is customers that are not able to make full payments and need advice. If these customers are identified, the organization can focus on reaching out to them with advice, such as long- term payment plans as opposed to hounding them with collections calls the customer might ignore. As a result, these customers will make incremental payments instead of making none at all.
Outbound solutions have filtering capabilities that can be used to make different contact lists. For example, if your data consists of values such as upcoming due date, days past due, credit score, etc. these can be used as filters.
Once your contact lists are created, you can use outbound tools to implement your different strategies. Whether that’s sending an SMS payment self-service URL to customers on the upcoming payment list or assigning the delinquent list to agents that are prepared to offer personalized long-term payment options, you need the tools to fit your strategies.
Customers Will Be Making Sacrifices. Better Customer Service and Empathy Will Win.
Based on an analysis by the New Economics Foundation, an additional 2.2 million people will be making sacrifices on essentials such as household bills or even a trip to the dentist.
These hardships in day-to-day lives will make it easier for them to become upset, yet it will also make them value the good experiences they have, now more than ever. Therefore, better customer experience is crucial.
To help improve customer experience, empathy will be crucial as well. According to a recent article, “households across the UK are finding themselves in strenuous situations that impact their finances.”
Customers will be faced with many struggles, so the way in which organizations interact with them is extremely important. A recent study shows that the top 10 most empathetic companies generated 50% more earnings than those ranking lowest.
So, what can organizations do to improve their customer experience and empathy? Financial organizations need to be able to leverage data when agents are interacting with customers.
If an agent is aware of life circumstances such as job loss or bereavement, they can control the tone of the conversation and the recommendations given. This will lead to more customers being willing to work with agents and will push them towards achieving the goal of the interaction.
Outbound solutions can assist in this area by allowing you to leverage the centralization of data to empower your agents.
Easily display customer account information on agent screens, so the agent knows who they are talking to and why, as soon as or even before they connect.
This will increase customer service, give agents the information they need to be empathetic, and simultaneously eliminate massive amounts time previously spent by agents doing manual account lookup, analysis, and dialing.
People Will Go Into Debt. Collection Departments Need to Be Equipped.
As much as people try to budget, when costs go up this much, debt for some is inevitable. A recent study shows that 58% of people who are currently facing unmanageable debt said that this was the first time they’ve had issues making repayments.
As people are unable to pay their balances, collections departments need to be prepared to handle an increase in the number of people to collect from and an increase in the amount to collect. This means sophisticated outbound contact centre software is crucial for financial institutions to keep up with these demands.
Alvaria offers outbound contact centre solutions that go above and beyond fitting these needs. The solutions have tools that help institutions place more calls more efficiently, while simultaneously empowering your company to deploy its strategies and lowering the administrative burden.
The outcome: more money collected by the same or even fewer agents.
Customers Will Have Questions. Inbound Volumes Will Go Up.
“Can I apply for relief regarding a late fee? How do I defer my payment? Can I get a lower interest rate?”
These are just some of the questions customers will be asking and, to that point, more often than before. If more customers have questions, that means more customers will be contacting organizations to ask them.
When inbound volumes go up, institutions need to be more efficient on outbound as well. Efficiency on the outbound side will free up time for agents to tackle the inbound side.
Outbound solutions have tools to ensure you are contacting customers at the most convenient time and on their preferred channel, whether that be SMS or phone for example.
This leads to a higher likelihood of the customer answering, engaging, and the agent resulting in a positive outcome.
The outbound solution can also work through multiple contact lists simultaneously and apply various percent distributions to those lists. This ensures that the agents are focusing on the right accounts at the right time.
So, What Will Things Look Like for Organizations in Banking and Finance That Are Not Equipped for the Cost of Living Crisis?
Those organizations will miss out on monetary opportunities, their contact centres will be inundated with work, agents will be stressed, and customers will be annoyed.
All of this on top of an already stressful and extremely unfortunate crisis that is affecting the entire world.
It is more important now than ever that companies make sure they have the right contact centre solutions in place to avoid the negative impact from this crisis.
Don’t be unprepared!