When coronavirus hit the UK earlier this year, banks were incredibly quick to respond to their customers’ needs, with offers of mortgage freezes, payment holidays and loans. In fact, Britain’s high street banks have granted almost 1.5 million consumers payment holidays who are struggling to repay their credit cards and personal loans during the coronavirus pandemic.

Although there were some bumps in the road while getting the systems and processes in place to facilitate these remediations, in hindsight that may end up being the easy part.

Now, as the government attempts to curb coronavirus spending (with the impending removal of government support), banks are starting to announce the end of these offers. For example, when a homeowner comes to the end of their mortgage payment holiday, their lender will contact them to assess their circumstances and agree on a manageable way for them to make up the deferred payments. Lenders should provide a range of options, which may include an extension of the existing mortgage term or altering monthly payments if the customer can afford to do so.

Given that the number of people on company payrolls fell by 612,000 or 2.1% between March and May as lockdown continued to hurt the labour market, banks will be delivering bad news to many individuals who are experiencing financial hardship – none of which has been of their own doing. As a result, banks need to be even more sensitive to their customers who might be in a difficult financial position.

So, as this financial support is gradually withdrawn, what will be the wider impact on people and businesses, and how can banks manage this process to soften the blow? Thinking back to the 2008 financial crash, banks’ reputations were left in tatters due to mismanagement, so how can they ensure they don’t make the same mistakes again?

Understandably, delivering a considerate and comprehensive customer experience will play a fundamental role in the coming months. Underpinning this will be excellent customer service systems and the right people, with sufficient training to deal with difficult situations and to have those inevitable hard conversations.

In terms of combatting spiralling customer debt, banks must help customers consolidate their existing debt and reduce their monthly payments. By doing so, it will be possible for banks to help their customers and, where appropriate, generate additional revenue as a result. Giving these customers relevant offers of help to see them through the next few months could be extremely valuable in helping them retain some financial stability. It will also prevent collections operations from becoming crippled with documentation gathering and lengthy calls. More importantly, customers will remember the experience they have with their bank in a time of need.

Customer service enquiries will continue to be an issue with ongoing high volumes of more complex cases. To stabilise this, banks must take advantage of technology that enables the auto-generation of cases to track and extend management and support across the customers’ channels of choice.

Many banks are already accelerating the process of identifying areas of automation and process streamlining to relieve pressure on their customer service teams but also to help the customers get resolution quicker. Combining this approach with extending parts of the loan servicing process across all the bank’s digital channels can alleviate the strain even further.

Of course, not all cases will be the same. As a result of the pandemic, it has been predicted that businesses will not fully be back on their feet for another twelve months – however, that could be much longer for businesses who are in the travel and leisure industries, for example. Therefore, banks will also need to decide whether these sectors should be given special treatment, so they do not collapse altogether.

The financial sector needs to realise that there is an opportunity now to really practice compassionate banking, to be there for their customers during this difficult and scary time. The institutions that ‘share the burden’ in prudent and empathetic ways will be the ones that will achieve the highest customer satisfaction and retention.