The global payment collection services market is facing various challenges, such as geopolitical and economic uncertainties, marked by increased consumer indebtedness, regulatory measures, and regional conflicts. Recent events such as the Credit Suisse collapse have heightened the demand for effective collection services to restore customer trust and fortify financial security. In the UK and Ireland (UK&I), the combination of rising inflation and economic downturn highlights the vital role of collection services for businesses striving to maintain financial stability in difficult circumstances.

Customer vulnerability further complicates payment collection services, with a notable increase in arrears and individuals experiencing financial difficulties. In January 2024, UK household debt reached GBP1,838.7 billion, with the UK household debt-to-income ratio peaking at 124% in Q4 2023, highlighting significant strain on households. Additionally, 67% of UK adults fell into potentially vulnerable categories outlined by Consumer Duty regulations. These statistics reveal a stark reality, indicating a notable rise in vulnerable customers. This increase is evidenced by a surge in household debt, rising mortgage arrears, and alarming rates of daily insolvency declarations and property repossessions. These economic hardships profoundly impact individuals' mental well-being, contributing to increased levels of stress and anxiety. It is vital for enterprises to provide tailored guidance, empathetic customer service, and support through various channels. Empathetic customer support builds trust between creditors and debtors, easing the burden on vulnerable customers and helping them manage their financial responsibilities more effectively.

In this viewpoint, we explore the payment collections market and the regulatory landscape in the UK&I. It provides guidance for enterprises on understanding customer vulnerability, delivering empathetic customer service, and evaluating the impact of emerging technologies, such as generative AI, in the collection services sector.

Scope:

• Industry: all
• Geography: UK&I
• This report is based on primary and secondary data collection, conversations with market participants, and fact-based research

Content:

In this viewpoint, we examine:

• Trends in the UK&I payment collections market
• Customer vulnerability and current state in the UK&I
• Regulations governing payment collections in the UK&I
• Key considerations for selecting the right provider
• Generative AI’s impact on the payment collections market

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