Imagine a bank that stands by its customers even when they experience financial difficulty

Tesco Bank recognises that for many people, financial difficulties are an unexpected and unavoidable part of life. The impact of financial hardship can be both devastating and long-lasting. Those experiencing debt often taking years to fully recover financially. With this in mind, Tesco Bank partnered with Modern Human to redesign their Collections and Recoveries process. They wanted to create a customer-centric process that offers help and support to customers in times of hardship, helping them to get in control of their finances and get back on their feet sooner.

We assembled a cross discipline team and conducted mixed-method research into the current Collections and Recoveries process. Our goal was to develop a deeper, more nuanced understanding of the qualities and drivers of financial difficulty, and how customers respond to financial difficulty on a psychological level. We explored the potential impact of the Bank’s communication protocol on the customers state of mind, and identified a number of situational profiles to explain the different ways in which customers respond to debt. Then, we dug a little deeper. We wanted to identify how financial difficulty occurs in the first place, and the different types of debt that exist. What was the driving force behind a customer’s current situation? Had there been a chain of small events that led to this point, or a single catastrophic one? Was their difficulty short-term, or was it likely to last much longer (or even be permanent)?

Meanwhile, we took a deep dive into the current Collections and Recoveries process. We wanted to understand how the Bank communicates with customers, what options are available for those struggling with debt, and how the experience might be improved for customers and colleagues alike.

Our ethnographic research allowed us to get a better understanding of the root cause and the origins of customers' financial difficulty and next steps. Interviews with customers allowed us to hear about their situation from their own perspective, while colleague interviews helped us to build a picture of their day-to-day roles and to understand their values, frustrations, motivations and personal objectives. To build on our colleague interviews, we also facilitated a series of colleague codesign workshops. This ensured colleagues were involved and invested in the service design process.

Following an in-depth analysis of all our ethnographic research findings, we were able to work with the Tesco Bank team to create a design brief for the revised Collections & Recoveries process. The brief gave us a number of areas to focus on, which in turn helped us to create a service design that puts the customer’s needs at the heart of the process, and empowers colleagues to make a tangible difference.

A key aspect of the service redesign was an updated communication strategy. Currently, when a customer misses a payment on their credit card or loan, the Bank attempts to contact them via phone. The customer knows that they’ve missed a payment and can see that Tesco Bank is calling them so they panic and assume that the Bank is jumping directly to legal action or repossession. Having examined this experience from both the customer and colleague perspective, we could see that this could not be further from the truth - the Bank is calling to offer help, advice and support. Our revised communication strategy puts the emphasis on offering reassurance in an accessible and non-intrusive way. SMS is used as the default means of communication wherever possible, allowing the bank to relay important information without depending on the customer answering a call. This helps to realign the customer’s expectations of the bank and puts the control back in the customer’s hands.

Increasing the availability of digital self-service options was an important part of our service redesign. We wanted to make it easy for customers to service their account by improving access to familiar channels such as the Tesco Bank App and online banking facilities. By providing customers with accurate, real-time information about their account via these self-service mediums, the Bank makes it easier for customers to get back in control of their finances. Improved self-service also helps to reduce call volumes, as customers who would have needed to call in to make payments or get information can now access these services digitally.

Working with subject matter experts at Tesco Bank we were able to create a number of new potential solutions to meet the particular needs of customers in financial difficulty. We also identified a number of options for customers who know they are going to miss a payment and call the Bank in advance to ask for help. Our updated service design lays out several new options to help them get back on their feet as quickly as possible.

Our intention at the outset of the project was to improve the C&R process for both customers and colleagues. Our research had shown us that colleagues handling C&R cases are under significant stress and cognitive load, with multiple computer systems and logins required on every call. Our recommendations for improving colleague experience are focussed around reducing this cognitive friction, by updating internal systems and making it quicker and easier to handle customer calls.

Reducing the cognitive load caused by complicated computer systems will allow colleagues to offer better service and support to customers. Colleagues we interviewed spoke of conversations with customers that had taken place during some of the customer’s darkest moments. The impact of these calls on colleagues was evident and heavily influenced our recommendations for improving the colleague experience. Whereas previous training was, out of necessity, focussed on learning the Tesco Bank systems, our revised training shifts the focus towards building skills that add value to the customer. This includes financial advice and building relationships. Training colleagues in these areas will ensure that customers receive expert advice from someone they trust and feel comfortable speaking with, and increase colleague job satisfaction by allowing them to make a more tangible difference.

Our service design also includes recommendations on offering ‘above and beyond’ support to customers in the event that the worst should happen. Some of the cases we studied involved customers whose financial difficulty was the result of a truly catastrophic life event, such as the death of a child or a cancer diagnosis. It’s unlikely that a person in these situations would reach out to their bank for help, but if they do then Tesco Bank colleagues should be empowered to support them. Our service design includes recommendations for a number of ‘above and beyond’ measures that can be used at a colleague’s discretion in the most serious of cases, to help a customer get back on their feet.