Categorise an individual’s income and spend in seconds

As the effects of the COVID-19 pandemic ripple through the UK economy, there has been increased pressure on people’s finances. Although the UK is emerging tentatively from lockdown, the economic conditions and financial circumstances of millions of consumers are certainly not easing.

Until now, the real-impact hasn’t been seen in the credit market – masked by the many support measures. We are already seeing rising number of customers struggling; higher levels of indebtedness and credit demand increase for already at-risk customers. By mid-June 9.1 million British workers had been still furloughed – this continued to grow to 9.5 million by July 19th. A significant proportion of this cohort are facing genuine uncertainty over the future of their jobs and earnings.

Through the crisis, income shock is felt by a significant proportion of the population. Over one third of UK borrowers have experienced an income shock and the signs are that the impacts of this are growing in scale and severity. The continuous monitoring of behaviours and affordability is critical not only for identifying stress, and therefore pre-delinquency, but also for protecting vulnerable consumers. Efficiently managing consumer requirements for assistance will be critical for supporting the increasing numbers of customers in hardship.


Businesses are now focusing on:

 

  • Increasing efficiencies and improving customer experience from better digital services
  • Assess risking accurately amongst customers to deliver better outcomes,  and ensure they treat people fairly and responsibly
  • Managing customers responsibly with more personalised and responsive services
  • Maximising profitability and retention by setting the ‘best’ rates and limits and targeting customers at the right time with the right product.

How can Experian’s Categorisation as a service help?

Many organisations, such as banks that have a large number of customer’s with current accounts are turning to transaction categorisation engines to help them make sense of a customer’s financial well-being as revealed by their income and spending behaviour.

These engines work by adopting sophisticated data science such as AI (automated intelligence) and machine learning techniques to accurately categorise an individual’s income and spend in seconds. Experian’s Categorisation as a Service (CaaS) automates and simplifies the analysis of bank transaction data to provide an understanding of a customer’s income, expenditure and credit behaviour.


CaaS gives you the insight to make  key decisions for an individual or a portfolio of customers. 

CaaS can help you:

  • Extract value and proactively manage existing customers with better insight by improving your understanding of an individual’s finances to anticipate and deal with affordability issues or signs of vulnerability ahead of time. Applying this same level of care and attention to new lending will enable you to better understand consumers’ affordability status and offer the right products, at the right time.
  • Personalise your engagement by using your insight to create and deliver more personalised services. Make customer conversations more relevant and productive and work together to deliver better outcomes.
  • Create better digital experiences by providing real-time insight that helps people manage their money. Use triggers and alerts to assess behaviour and recommend better value products and services.
  • Better inform risk when customers are applying for credit to confirm what they can truly afford, but also allow for the revision to credit policy limits to allow a lender to accept more customers, without increasing risk using the additional insight CaaS provides
  • Proactively manage risk and remain compliant by monitoring risk across your portfolio now and in the future to ensure you have the correct capital adequacy place to respond to changes in the economy or your customer’s financial well-being.

Automate income and expenditure data capture

When you automate the capture of income and expenditure you can personalise the insights for more accurate and reliable assessments. This is can be invaluable in a collections exercise where an organisation is trying to recover debt, whilst simultaneously trying to treat customers fairly. CaaS can be used to automate data capture, reduces costs and increase efficiency.

  • Perform accurate assessment of the actual amount a customer can pay based on their Income & Expenditure position
  • Make informed decisions on customer treatment strategies and customer segmentation to create personalised debt repayment plans
  • Avoid detriment to vulnerable customers, who may have other vulnerabilities beyond financial hardship

Learn more about Experian can help you:

  • Join our monthly insight webinars – registration and attendance is critical, as the sessions are live and not recorded
  • Browse our Covid-19 resource hub – containing assets relevant ot the market, and challenges
  • Book a consulting visit at Business.Enquiries@uk.experian.com– where we can work with you to share insights, and thoughts around the necessary strategies needed to help you understand your exposure to economic shock