New data sources and increasingly joined up technology mean that not only is it possible to better understand a debtor’s circumstances, it is also possible to act on that increased knowledge. Even at the highest possible level, the benefits associated with starting the journey towards understanding the individual are clear. Take regional variations in indebtedness; when you look across the UK, there are significant differences in the profile of individuals in debt and how they look at options to resolve their situation. For example, average bad debt per individual in East Anglia is less than half that of the South East or a third of the North West. This may seem like a fairly obvious point given associated wealth in different parts of the country, but the trend becomes increasingly interesting when you analyse how individuals in different regions address their debt. In the South West of England individuals are 22% more likely make a payment on their debt than the UK average. Compare that to payment rates in Scotland where individuals are 17% less likely to pay, and an interesting pattern begins to emerge. Across the UK, region by region, we see significant swings in payment penetration. Continuing the regional theme, Wales is characterised by higher payment penetration but lower overall liquidation rates, which implies a higher proportion of individuals with an active desire to address their debt but perhaps without the means to do so. Compare that to the South East where the reverse is true and you would have a strong case for regional settlement strategies.
Given these regional biases, imagine the fragmentation that exists at more granular levels right down to individual circumstances and imagine knowing that before you determine a treatment strategy?
Put simply – as long as you’re using data thoughtfully, you can never know too much.
By Nick Georgiades, Director – Advisory Services at TDX Group.
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