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A changing landscape

According to the latest Office of the Superintendent of Bankruptcy (OSB) stats, the total number of insolvencies (bankruptcies and proposals) in Canada increased by 7.3% compared to the previous month. Bankruptcies increased by 6% and proposals increased by 7.7%. 

While these stats paint a worrying picture, they are perhaps unsurprising. The billions of dollars in emergency funds provided by the government throughout the COVID-19 pandemic acted as a lifeline for many households and businesses. Now, high inflation and rising interest rates are creating a wave of uncertainty.

But what steps need to be taken to support those facing financial hardship and how can technology help?

Understanding affordability

With recent OSB stats highlighting the fact that between November, 2021 and November, 2022, consumer insolvencies increased by 9.5%, there’s a real need for the industry to deploy specialist technology to help process and effectively manage these cases. 

For lenders, the ability to access a clear view of a person’s financial situation is crucial. Without this, there’s a risk that a person may end up tied into an unaffordable repayment plan, which can be detrimental to their long-term financial wellbeing.

However, this can be challenging for those reliant on siloed or unreliable data. By digitally collating information provided by the consumer and the lender, along with credit reference information, digital solutions such as Aryza Recover can create a unique view of a person’s financial position in just a few simple steps. 

Once collated, it’s easy to view the repayment options available and depending on what the affordability check calculates, a decision can be made to either continue with an existing plan or consider alternative options, such as a payment break.

By running a range of strategies across multiple products – allowing different rules and outcomes to be applied to each one before configuring the outcomes, these systems can also calculate affordability and disposable income on an ongoing basis. 

Once this process is complete, customers can access an overview of their finances and a summary of the actions they have chosen, in an intuitive and easy to understand format. It’s important to remember that many will be finding themselves in financial difficulty for the first time, and may feel embarrassed speaking to a person face-to-face or over the phone. 

With debt at an all time high and only increasing, there’s a real opportunity for lenders to utilise technology to support consumers. At Aryza, we are committed to developing user-friendly digital solutions, able to remove much of the over-complication and ensure every consumer can access the support and guidance required. 

 

 

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