Wednesday, 31 July 2013

All caterpillars are butterflies on the inside: an intern's view of working at TDX Group

Spot the odd one out – 1) Bungee jumping. 2) Quad biking. 3) Working in the debt industry. 4) Swimming with sharks. I bet you chose number three, didn’t you? Presumably because it appears to be dead boring… right?

I currently find myself halfway through a two month internship with TDX Group, and I have to say, it really is quite the opposite of boring. Being a student of Ancient History, the debt industry is a brand new field to me, and I will admit that I did have my worries about how I would take to it, or to be brutally honest – would I actually like it!

It turns out that my fears were completely unwarranted. Instead of counting down the clock each day, I’ve found myself thrown deep into a world filled with exciting and unpredictable variables, challenging regulations that demand constant attention, and best of all, countless opportunities to stretch myself and produce work that I know has a significant end result.

From day one I’ve been given stimulating work to do, work that I get excited about seeing through to the end. I actually find myself feeling sad that some of the projects that I have been working on won’t be completed until after my internship finishes! Now admittedly, the debt industry may not be to everybody’s taste, but for me at least, it certainly falls into life’s ‘don’t knock it until you’ve tried it’ category.

What has really made my time here so enjoyable though, are the company and the people that form it. Everybody I’ve met has been extremely passionate about their work, and has been kind enough to take time out of their busy schedules to bring me up to speed on their role within the company. Whilst there’s a lot to take in, everyone loves being asked questions about their particular specialism, and nobody lets ego or stature get the better of them. There is also a great sense of being a team within the office, with even the most senior of management sitting in the large, open plan desk area. Even during my short time here I have noticed the positive effects this has; it’s little things like that which help to really make TDX stand out from the crowd.

I know full well that I’m extremely privileged to have had the opportunity to be spending my summer at such an exciting and interesting company, and have learnt a lot during my time here; insights and knowledge that I know will stand me in good stead wherever life may take me.

If this is how I feel only coming up to the halfway mark of my time with TDX, then I’d say things are looking very good for the remainder of my internship! If you’re reading this as a student, then I urge you to consider doing a summer internship, the skills and experience you pick up are invaluable in the job market place. If you’re reading this as someone specifically researching TDX as a workplace, then I can assure you that it truly is an excellent place to work.

Until next time,

James Bradshaw, intern at TDX Group

N.B. I’ll be writing a ‘conclusion’ to this post as I finish my internship, so make sure to check back towards the end of August for that.

Wednesday, 24 July 2013

The Cost of Compliance

At a recent meeting I was asked if I knew of any work available on the cost of compliance to our industry. On the train home I had plenty of time to reflect on the question and how our industry operates.

In the ‘good old days’ collections was all about getting the money quickly. Pushing for payment in full first, if this was not possible then it would be two instalments and slowly extending repayment periods. Key collections metrics for agents were average payments and promises kept among the normal operational metrics. More often than not a debtor has more than one debt, and it was a competition to get to their disposable income first so yours got paid first.

The push for higher payments and short repayment periods meant that many promises were broken along the way, as they were never really affordable in the first place. Even if a customer  could afford the current creditors payment scheme, as soon as the next creditor got in touch and convinced them to pay them then, once again, the previous creditor’s scheme became unaffordable and the arrangement would be broken.

If you were consistently the first creditor in conversation with the debtor and always managed to get payment in full then you would not want this system to change. For all the others, broken promises teams would have to re-engage the customer and start the cycle again, and operational expense was certainly not optimised.

The principle of the current compliance regime is affordability, we can all argue what should be reasonable expenses to include in calculating this – I often do - but we cannot argue with what is trying to be achieved. Ensuring the debtor can pay off their debts as quickly as possible in a sustainable way is in everyone’s interest.

There will always continue to be debate on how we do this:
Do we need to do an income and expenditure (I&E) to assess affordability for every customer each time we agree a payment in collections?
Should we do a full I&E each time we make a loan? I have recently taken out a mortgage and have been asked fewer questions about my income and expenditure than I would get if I wanted to pay a debt off in a collection agency.

Ultimately,  the principles of compliance are not the ones costing the industry, it is the interpretation and application of these principles which are. It is this balance which we should continue to focus on to get right. If we could do this, the question I would have been asked is ‘what is the cost of not being compliant’?

By Nick Georgiades, Director - Advisory Services, TDXGroup

Wednesday, 3 July 2013

4 tips to ensure compliance and performance – a lesson from the gentleman’s game

In 2003, England won the Rugby World Cup; the first time a northern hemisphere country had ever won. The team that took the trophy home was clinical, disciplined and professional. Getting to that point did not come by mere chance; it was the culmination of several years’ worth of dedication from a group of coaches, players and mentors putting in place the right fundamentals to ensure ultimate success.

Coach Clive Woodward had strict rules for his players. He insisted that all players were ready for pre-arranged meetings 10 minutes early, that they dressed smartly at all times, that their language was clean in public areas, that mobile phones were only allowed in players' rooms….. and the list went on. Woodward argued such "critical non-essentials" make a huge difference in business, sport and, indeed, life.
So, how does this relate to debt?

In April 2013 the Financial Conduct Authority (FCA) came into being, with new powers to ensure that financial services companies demonstrate and measure the fair treatment of customers, and prove how this results in fair outcomes for each individual customer. In order to meet the standards expected by the FCA, taking a leaf out of Sir Woodward’s book would certainly do no harm.

1. Fix your platform
There was no doubt in anyone’s minds that if a game of rugby came down to the last 10 minutes, Woodward’s team would be the fitter, more physically adept team, and would close the game out.  It was this confidence in their foundation - the platform if you will - which ensured that when it came down to crunch time his players would win the battle in every situation. This is true in most situations, including debt - if you only have tools that allow you realise 60% of the benefits, you need to look for ways to quickly access that extra 40%.

2. Know more
Woodward had teams of analysts studying teams, players and tactics, which, in the end, revolutionised the way in which international teams approached test match rugby. Taking a leaf from his book, if you continually try to understand more about your customers in arrears and learn how to use that knowledge to ensure fair treatment, improved performance will naturally follow. For example, do you currently know which of your customers is already paying one of your existing DCAs? What additional data could you gather to help make contact? What is the level of activity your agencies are undertaking? Too little activity and you run the risk of poor performance, yet too much just simply isn’t fair to the customer. There’s a fine balance between efficiency and harassment and you need the tools to undertake this balancing act.

3. Use the power of prediction
Studying team decision making when in play can help you here - how does England counteract and premeditate opponent moves on the field? By always being one step ahead and using intelligence instead of pure brute strength.  So, what are your tactics with debt? Do you understand how your customers will respond to different forms of contact? Knowing how customers react in situations and being able to premeditate is a powerful weapon in your arsenal.

4. Focus on the prize
Woodward had a goal in mind; everything he and his team did was with the single aspiration of being the best team in the world in 2003. Similarly, within our industry we have an impending deadline of 2016 – the date the FCA regulations come into play. The opportunity exists now to ensure you are best prepared for this day.

In summary, every team and every business has great aspects, but it’s the ability to identify the areas where improvement can be achieved, and the prospect of excelling in every department that sets the world-class apart from the ordinary. Just ask Woodward!

By James Breadon, Business Development Manager, TDX Group