Meeting the demand for debt advice in 2022 with people-centred fintech

Ryan Hayes, COO - Advice Sector, Trustfolio (formerly TIPTrust)
09 February 2022

Since the onset of the pandemic, the debt advice sector has been awaiting a ‘tsunami’ of demand for its services as a result of the economic impact, particularly on the most financially vulnerable.
However, with forbearance measures in place, this didn’t happen immediately and commentators predicted that the true consequences for household finances would be delayed but significant.

Almost two years on from the first Covid-19 lockdown in the UK, a ‘perfect storm’ is now brewing with a combination of removal of emergency support measures, a cost-of-living crisis, and interest rate rises all landing at once. Unsurprisingly, Citizens Advice has now issued a “red alert” warning saying that more people are seeking one-to-one support from them that at any other time during the pandemic. In particular, ‘crisis support’ such as referrals to food banks, advice on emergency grants, and help with managing energy debts is at the highest level on record.

Registry Trust, the not-for-profit organisation which maintains the Register of Judgments, Orders and Fines, also released a report last month raising serious concerns about the fate of financially vulnerable households in 2022 and calling for changes to the debt enforcement process to protect those most at risk. It identified better access to debt advice and more effective use of data on indebtedness to target policy measures; both things that we wholeheartedly support.

TIPTrust, formerly The Insolvency Panel (TIP), was founded in 2016 by Trustfolio CEO Lou Yates who had a vision to transform Individual Voluntary Arrangements (IVAs) with innovative technology and, in turn, offer free credit report data to debt advisers. Since then, backed by AdviceUK, the UK’s largest support network for independent advice organisations, it has evolved to focus on streamlining the free sector debt advice process through its Debt Adviser Support Portal, which has so far been successfully used by over 140 agencies and 800 individual advisers. It recently became part of new ‘debt-tech’ collective Trustfolio, which will enable us to continue offering and further developing the portal at a low cost to advisers by tapping into the latest fintech expertise and wider credit sector perspective of the group.

Our mission to enable better debt solutions by empowering and improving (rather than replacing) face-to-face advice, has never been more important than it is now. The current turbulence around debt advice commissioning and the loss of some face-to-face services means that, while demand is at its highest from those most financially vulnerable, supply is dwindling. The funding and capacity issues that have been building for many years in the sector are now coming to a head.

There are many fintech tools on the market, some of which have had more success than others in terms of their real world impact on outcomes for the consumer-in-debt. As highlighted by Sara Williams (aka Debt Camel) in one of her latest blogs, ‘robo advice’ algorithms aren’t capable of dealing with the nuanced and complex issues faced by clients in debt, even with machine learning. AI alone can’t challenge a court decision or call a landlord to prevent an eviction. Because we combine the latest and most innovative tech with a team that has knowledge and experience of working in the debt advice and related sectors, we can use it to achieve real outcomes based on the needs of advisers and their clients. The self-service, online-anywhere Debt Adviser Support Portal puts the tools and data at advisers’ fingertips (without the client even needing to be digitally engaged), utilising the expensive and sparse expert human resource to its full potential by removing the administrative burden at the right point in the advice journey. This means that they can make funding go further and focus on the most important stuff – high quality client engagement and advice delivery for as many people who need it as possible.

We need to speed up the adoption of the latest fintech solutions so that those in financial difficulty – and therefore wider society – can start reaping the benefits of the innovation, but to do this, we have to maintain the human element. Debt is emotive and has a huge impact on people’s lives; people who often don’t have a voice or anywhere to turn for support. Collaboration is key, which is why Trustfolio was created. Only we bring a deep understanding of the full lifecycle of personal debt to the development of solutions that work for creditors, third parties, regulators, and consumers.

We have some exciting new developments in the pipeline, including the integration of Open Banking data to improve the income and expenditure process in the same way our credit report system streamlines the collation of creditor information. We are working closely with debt advisers to understand and meet their needs at a time when increasing their capacity and efficiency is absolutely vital. The outlook for 2022 is bleak for many, but by working together and continuously innovating, we hope to bring about lasting change.

Find out more about the Debt Adviser Support Portal now.