FICO Solution Helps Firms Manage Deluge of Payment Holiday Requests due to COVID-19

Responding to the sharp increase in consumer requests for payment holidays related to the COVID-19 pandemic, global analytics software firm FICO has created a set of digital scenarios that can help lenders, telecommunications providers and other firms meet this urgent need in an automated way. The scenarios, set up in its FICO® Customer Communications Services, enable firms to quickly and easily set up new payment schedules that help customers seeking immediate relief.

Around the world, governments and financial services providers are announcing payment holidays that help customers who have a cash crunch due to the pandemic. For example, the British government announced a three-month payment holiday for mortgages last month; the German Bundestag announced a payment holiday scheme which became effective 1st April; and several of South Africa’s tier 1 banks have announced payment holiday schemes.

“Many of our customers are reporting as much as a month’s worth of inbound customer requests for payment relief in a single day,” said Russell Robinson, who manages FICO’s customer communications solutions consulting in Europe, the Middle East and Africa. “At the same time, some call centers have less than 50 percent capacity due to illness or the need to deal with sick family members. This means customers that need to opt in for a payment holiday can’t get through to someone to set it up. We configured our omni-channel communications system to automatically review and approve requests.”

The configuration of FICO® Customer Communication Services includes:

  • Standalone inbound automated voice virtual agent to handle customer payment holiday information queries and actual customer payment holiday eligibility and opt-in.
  • Interactive SMS ‘chat’ virtual agent establishing eligibility for a payment holiday, reason holiday required and customer opt in.

The delivery and set up of these scenarios can take place in just a few days.

“It’s vital that people be able to approve payment holiday requests quickly in this anxious time,” said Robinson. “In addition, banks will need to record this information not just to better support customers, but to manage and defend their impairment strategy under IFRS 9. Under relaxed IFRS 9 rules announced by many regulators, customers who don’t make payment within 31 days because of a payment holiday aren’t automatically recategorized as Stage 2 risks, requiring much higher impairments be set aside. This takes pressure off the collections team and also protects the bank’s liquidity.”