Jan:Feb 2017 Credit Management magazine

Technology is changing
at a rapid pace and the
collections industry is
well placed to take direct
advantage of this, to act not
just more efficiently but
also to the benefit of the
customer journey. This is
an industry that needs to
keep ahead of the curve on
changing technology - the
way we collect now will
change significantly over
the next ten years.
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be announcing resources and support for its
members, on the regulation.
“GDPR will come into play before we leave the
EU and Brexit doesn’t mean it’s going to change,”
Peter warns. “On day one the legislation will be
just the same and if we want to continue to trade
with Europe it’s going to stay pretty similar.”
Yet the industry has time to deal with this and
the end result is not likely to be unworkable.
“There’s no point reacting too early,” says ARC
Europe managing director Dewi Fox. “These
things start as doom and gloom but have a habit
of changing. We are nimble and can wait until
there is clear guidance.”
Meanwhile Zach Lewy suggests changes to
accounting standards will have a material effect
on the supply of portfolios, particularly IFRS 9,
which creditors must implement by the start of
2018.
“Changes to accounting standards will affect
bank balance sheets and appetites to lend.
Banks will have to recognise lifetime losses of
the loan at the point they make the loan, not as
they happen. If they bank the loss upfront, that’s a
massive incentive to move riskier lending out of
the mainstream banks,” he says.
That, together with much lower losses from UK
lending in general will mean lower volumes in
the UK market. As banks seek lower risk profiles,
Zach says some borrowers may find themselves
shut out of mainstream lending solutions.
FCA POST AUTHORISATION
Attention now turns to the focus the FCA will take
in the coming year. In November its action against
debt buyer Motormile for failing to conduct
sufficient due diligence demonstrated that the
regulator will bite.
“We are warning our members that just
because they have got through authorisation,
that doesn’t mean they can relax. There will
undoubtedly be focus on some of them simply
because of the number of consumers they
interact with,” Peter Wallwork adds.
“The market may have felt that getting through
the application was the challenge,” agrees Najib.
“Our view is that day to day monitoring is the
challenge. That may create some other bumps
and bruises along the way.”
This will be further amplified by the extension
of the Senior Managers Regime and Certification
Regime to consumer credit firms by 2018.
The FCA’s thematic review on staff
remuneration and incentives is also due to report
early this year. Commentators hope that the
report will find the collections industry advanced
in this area – as it did when investigating early
arrears in 2016.
However, nothing is guaranteed, as John
Ricketts, Commercial Director at Allied
International Credit and Vice-President of the
CSA, says: “It will have a direct bearing on how
14 January / February 2017 www.cicm.com
The recognised standard