Innovation and ethics to define future of credit management

Hannah Cook, Director of Intrum’s Group Digitalisation Programme, outlines one of the company’s key objectives: to lead the transformation of debt collection services.

The credit management industry is at a crossroads. After years of comfortable margins, digitalisation is disrupting and challenging the sector’s traditional business model. Consumers and businesses are increasingly using digital financial solutions, and money – once a scarce physical resource – has become both virtual and apparently plentiful.

The industry needs to innovate to meet higher service expectations. It also has to deal with the ethical consequences of rising consumption and ready access to credit. But it is not digitally mature. New entrants to the market are introducing straightforward disruptive solutions such as automated collection and mobile payment services, leaving traditional companies to handle the complex cases that cost both time and money. This is unsustainable.

Hannah Cook says: “Digitalisation is no longer simply an option: it’s a must for businesses to survive.” 

An opportunity not to be missed
Cook regards digitalisation as a prime opportunity and believes Intrum’s culture of corporate social responsibility and commitment to innovation, and its position as Europe’s biggest credit management company, make it well-placed to lead the industry’s transformation.

“We are now set to step up the pace of digital innovation and position ourselves as an innovative partner to our clients and customers,” she says. “Our services need to be personalised, simple to use, and relevant.”

Intrum will be investing nearly EUR 10 million a year from 2018 to 2020 in digitalisation, modernising its digital platforms, increasing the use of automated processes and chatbots (using artificial intelligence to converse with customers online), and developing data analytics to boost collection performance.

Digitalisation can solve its own challenges
The beauty of digitalisation is that it provides solutions to its own challenges of raised service expectations and easier credit causing more debt. Fully-automated pre-collection services can improve cash flow for small and medium-sized enterprises (SMEs), facilitate customer payments, and allow any related issues to be handled in a straightforward, ethical manner, so clients stay loyal. Such services also allow a credit management company to focus on complex cases that take time to address. “In such cases, there will always be a place for personal debt advisors,” says Cook.

Intrum has developed digital education tools, such as Spendido and the forthcoming SmartPay app, to help young users to manage their personal finances. “Even though social responsibility is increasing in importance for young people, they are getting more into debt than ever.”

Making big data ethical
Data analytics can help companies innovate and address debt problems. The challenge is to ensure that big data’s ability to predict consumer spending and debt behaviour, and to provide optimised payment plans and tailored advice, conforms with legal requirements including GDPR.

“If we're not careful, no-one will trust us with anything,” says Cook. “Information security and respect for the data privacy of the individual need to be the basis of everything we do. When we designed our data-processing platform, we took this into account, so we were able to adapt to GDPR with minor modifications.”

Digital adoption in Europe: a mixed picture
Convinced that Intrum can benefit from digitalisation, Cook nevertheless acknowledges that there are varying digital adoption rates throughout Europe. The Nordic Region is at one end of the scale, having embraced mobile bank ID and personal payment apps such as Sweden’s Swish and Norway’s Vipps. Italy, which lacks the infrastructure to create trustworthy digital services, and Germany, with its culture of personal privacy, are at the other. But, says Cook, “countries across Europe are catching up fast.”

A force for good
Overall, she is excited by the challenge of helping to change Intrum, the industry and society for the better. “Our commitment to ethical debt collection gives us a unique selling point,” she says. “We’re proud of the fact that over 80 per cent of our cases are solved amicably. And we have the technology and capability to innovate, having a footprint in so many countries. We are well-positioned to change this industry and be a force for good.”