Payment Holiday Requests Spike, and FICO is There

April 13, 2020         By: Steven Anderson

With the ongoing Wuhan virus pandemic in play, it’s no surprise that people are using mobile payments in new and unusual ways to help close the gap between what they know of shopping and what they can actually do now. Also with the changes in the field comes a growing number of payment holiday requests, a point that many are scrambling to adapt to. FICO recently tipped us off about its own move to help accommodate the growing numbers of payment holiday schedules.

Payment holidays are on the rise worldwide, ranging from a three month mortgage holiday in Great Britain to a similar scheme in Germany. Recently, South Africa even got involved and offered up its own such operation.

All fine and well, of course, but actually making it happen takes some work. With banks finding that a month’s worth of inbound requests are arriving every day, there’s a clear demand for a solution that will help accommodate all these requests. With FICO’s new Customer Communication Services, users get access to several new tools that should help speed up the rate that requests can be addressed. Tools included feature an automated voice-driven virtual agent to handle incoming queries, and a virtual agent that works via short messaging service (SMS) pathways to ensure that the caller is even eligible for such services.

FICO customer communications solution consulting manager Russell Robinson noted “It’s vital that people be able to approve payment holiday requests quickly in this anxious time. 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.”

One of the biggest problems involved in a matter like this is just addressing the sheer volume involved. Everyone’s looking for answers at the same time, which means the system is inherently plugged up. That’s bad news all around, but with the judicious application of virtual agents, like FICO is looking to offer up, that should go a long way toward thinning out some of the incoming and making for a better overall picture.

We’re still neck deep in a serious mess here, but it’s good to see that mobile payments, and mobile payments-related matters, can step in to help.