Context

About nine million people in the UK are over-indebted, with the supply of debt advice struggling to keep up with the demand. In order to adapt to the ever-increasing need for debt advice, the sector needs to be innovative and find new and alternative ways to reach and help their clients. Face-to-face debt advice remains crucial, but people increasingly turn to online channels of advice to access a range of different services. Rapidly advancing technology will continue to provide both opportunities and challenges for the delivery of remote debt advice over the next five years.

The study

This 2020 report was commissioned to inform the commissioning of remote debt advice services. The approach taken was a broad ‘horizon scan’ examining a wide range of contemporary trends that the authors identified, and feel will shape the future of remote debt advice for the next five years. The trends were split into two categories: Trends that will shape the lives of clients:

1. Individualisation of risk;
2. Changing working lives;
3. On-demand expectations;
4. Mental ill-health;
5. Digital exclusion

Trends that will drive technological changes:

1. Information and online communities;
2. Mobile channels (particularly smart ‘phones);
3. Artificial intelligence, voice recognition and chatbots;
4. Blockchain hosted databases;
5. Cybersecurity;
6. Open banking (individual access to personal financial data);
7. Breathing Space technology (a Government scheme to protect individuals and families struggling with problem debt).

This research encompassed:

• Six stakeholder interviews;
• Trend analysis;
• 18 expert interviews;
• Development of implications and recommendations in workshops.

Key findings

• More flexible and less-structured working arrangements can make incomes more precarious and budgeting more difficult, which can present issues with financial statements that assume continuous income.
• Specific advice for the self-employed is likely to be a growing area of demand.
• People will require longer opening hours and more convenient advice services, as well as a delivery channel that suits their day-to-day lives.
• Allowing clients to engage across multiple channels will increase inclusion, as will designing remote advice to be multi-channel (i.e. starting advice on one device, continuing on another, etc). However, it must be possible to complete all stages on a smartphone, to avoid some clients being excluded.
• Non-digital (face-to-face and telephone) services must be maintained to combat digital exclusion.
• Clients will need educating on finding and assessing quality information, as well as on spotting online scams and on cybersecurity.
• Some processes can be digitalised and automated, freeing up adviser time.
• Chatbots can be used for simple triage services, such as collecting basic personal and financial information. The volume of data could be managed using secure blockchain technology, which would create further opportunities for automation.
• A cross sector database could be created to understand client journeys and improve client outcomes, including where clients use multiple advice providers.
• Open banking could be used by advisers to make financial statements more accurate and ultimately give better advice. It also has the potential to be used by all customers – not just debt advice clients – to gain transparency and control over their finances.

Recommendations for commissioning

Remote advice services should:

• Be able to respond to less predictable lives, using digital channels to create ‘24/7’ availability.
• Empower and activate clients.
• Promote quality advice and stand out above the ‘noise’ by using engaging content, search engine optimisation, and client-friendly language.
• Embrace universal design to reduce barriers to access and ensure inclusivity.
• Prioritise smartphones as a delivery platform, but ensure advice is available on a multitude of channels.
• Increase the use of artificial intelligence, including chatbots.
• Prioritise cybersecurity, which will become increasingly important.

Recommendations for the Money and Pensions Service

1. Work collaboratively beyond debt advice – MaPS should explore ambitious new ways to work with stakeholders that work with clients on issues that overlap with debt advice, such as housing, employment and health.
2. Change the client relationship – MaPS could use digital tools and services for more ongoing engagement with consumers, trying to increase consumer engagement with their finances and potentially giving these individuals greater control over their money and facilitating behaviour change.
3. Help clients avoid harm – MaPS should help to improve standards in online information and informal advice, perhaps by developing a kitemark or verification system. They could also play a more prominent role on social networks as well as educating clients on searching for and identifying helpful – and dangerous – information and advice online.

Points to consider

Generalisability/ transferability

• This report is of significant interest to policymakers, stakeholders and other parties interested in implementing, and measuring the success of, remote debt advice interventions and initiatives.

Relevance

• These findings are contemporary and reflect the expertise of numerous stakeholders and specialists in the field of remote debt advice.