Over the past few weeks I’ve read numerous articles and had numerous conversations about the effect of the mortgage collapse on lending to people on low incomes (salary or welfare payments). The term ‘sub-prime’ is offensive – I detest it, but that unfortunately how the banks and much of the media refer to the group. It’s the last time I’ll use it here and I use it only so we’re all clear on the subject matter.

As part of my day job, I have spoken to a lot of people in the financial community and banking sector on this and the wider impact on financial markets, lending, credit for consumers and growth finance for businesses. Not that I’m an expert on any of this – all new to me. This is an area that I have spent a lot of time working on over the last 12 months. I’m continuing to learn more about it as we grow a global business. I am responsible for driving that international strategy and providing the leadership to see A4e through the challenges; world finance markets now form a part of my work. As ever for me, some interesting challenges and issues emerge from some of the media commentary and approach of institutions to this ‘liquidity crisis’.

What I have spent 16 years of my life doing, is working with hard to reach consumers, people who have multiple barriers to accessing services (public or private) that many of us take for-granted. Many of the customers I’ve worked with are ‘vulnerable’, ‘marginalised’, disenfranchised’, and – more importantly – do not think of themselves as ‘consumers’. In a global economy, they have sometimes not had access to education or training to learn the skills we need as consumers - for example, to understand the deliberately complex and non-standardised information lending organisations often put into the market for credit products. I have difficulty with that and I was lucky enough to go to school and university.

Equally important, many of the people I have worked with in my career do not perceive themselves as ‘consumers’ in other critical areas of their lives. In receiving public services, as an example, a common theme I have picked up in my working life is that people feel a lack of ‘control’ over their own lives. They feel as if they are ‘having things “done” to them’ and they are buffeted along through their lives with an inability to take ownership of the services they use. There are many reasons for this and it combines things that have happened with things that people have been responsible for doing to themselves - it’s not a simple issue.

Governments across the world – albeit at different stages of development – are seeking to tackle these issues. There is an emerging trend with governments. A recognition that as ‘consumers’ of public services, citizens have higher expectations of the services they receive. And that this is a dynamic process - not a static level of expectation. That’s why global public service reform is my chosen market for A4e. A4e’s business is about helping its customers feel like consumers. Helping them make positive choices in their lives and equipping them with the skills to do so. Assisting governments in finding solutions to these challenges and working in collaboration with organisations in the public, private and voluntary/community/faith sectors to make this happen. But that’s not the point of this Blog.

This issue of consumer choice and behaviour is not limited to public services. Far from it, as it applies to private services (like lending). Often the social welfare and responsibility that sits at the heart of public servants and organisations working in these sectors do not always make it to the service or product specification in private goods/service consumption.

Let’s take lending, where anyone can knock on the door of a ‘consumer’ who feels a lack of control over their life, who is used to having things ‘done to them’ and often has to put up with whatever they can find access to and make them believe it is ‘the only’ solution to a crisis. If it’s a ‘better’ day, that knock might be a door to door lender. If it’s a bad day it might be a loan shark and the repercussions from not keeping up repayments can be very different.

So what am I rattling on about? Good question and back to the point. The mortgage crisis and lending issues stemming from the US – which has been underwritten by a network of banking and financial institutions that we (as a global community) do not know the extent of yet - is driven by risk management. It is based on taking a risk on lending to ‘consumers’ who are relatively poor. It’s about playing the stakes, taking a gamble, on the ability of people to (a) make rational decisions on lending based on vague, non-transparent information (doesn’t seem particularly fair to me but what do I know?) and (b) that people will actually be able to get themselves ‘sorted’ and make enough money to pay off the debt. So, just a big old gamble then.

In all of the coverage and comment so far, I haven’t yet seen any reference to supporting the people affected by this process. What about the people in poverty, on low incomes, affected by this? The business of taking risks in lending to people on low incomes or in poverty is covered in the media but there is little comment on the people directly affected. There’s more coverage on how ‘tighter credit’ will affect the average borrower!

In the UK, there is significant work on-going to address these challenges in working with consumers to support behavioural change. With organisations like Treasury, the FSA, banks such as HBoS, the legal services commission and the National Consumer Council sponsoring initiatives, there is a recognition that more needs to be done to tackle these issues and put the customer at the heart of the process.

But there still needs to be a greater focus on how to support the many direct victims of this financial ‘crisis’. How do you help people make sustainable changes and improvements in their lives to enable them to be overcome these personal challenges? How do we enable people to learn new behaviours and change their approaches to life to ensure they do not become the victims of a risk managed lending model that seeks to treat its customer base as a commodity? And by that I don’t necessarily mean the lender directly providing financial aid to the US mortgage/homeowners but the extensive network of financial institutions ploughing their capital into this market sector to enable the lending in the first place. The commoditisation of this customer group is unacceptable. It reminds me of Trading Places.

But, that’s why I do what I do and other people do what they do. My interest is in how we support people to make sustainable changes to improve their lives. It’s why I’ve built A4e alongside the fantastic people who work here. We must put the customer at the heart of the work we do and we have to find ways to support our clients in making sustainable behavioural changes. One of the big projects I’ve been working on is launching an innovative and different Bank that will – one day – be able to tackle issues like this with a strong business model, social values and integrity. That’s for another day but we have partners, stakeholders and most importantly we will find the right people to create and deliver a new vision for the provision of financial services to people in poverty and on low incomes around the world.