As many companies task themselves with understanding, reacting to, and learning lessons from a changing world, there are some very straightforward routes to ensuring early warning systems are in place to flag signs of financial stress, help prevent delinquency and protect against risk.
However, even during challenging trading conditions, the ability to adapt to evolving markets at speed and scale to disruption, while protecting customers, assets and reputation, is already separating top-performing firms from competitors.
Based on Experian’s ongoing analysis for our clients world-wide, we have distilled the following 10 steps for ensuring the continued acquisition of new customers, safeguarding existing customers and upholding business quality.
1. Develop resilient credit management strategies
While efficiency reigns in a surprise-free climate, key to navigating unpredictable waters is resilience. In these times, it’s critical to safeguard customers against over-indebtedness. This means balancing customer opportunities with appropriate lending strategies by continually offering the right credit limits to the right customers. But determining the best credit limit for each customer amid evolving circumstances – both at the point of application and during a relationship – can present a minefield. Nevertheless, smart and scalable solutions are available to uphold decision-making and support both risk and operational objectives, whether that’s warding off bad debt or minimising business exposure.
You can learn more about credit management strategies here.
2. Update intelligence daily with real-time risk analysis
As unanticipated events unfold with every news cycle, it becomes more vital than ever to keep data at the heart of your strategies. Turning real-time information into insight and insight into action helps businesses make the right decisions for their customers across the customer lifecycle. We all know that data provides the raw understanding that fuels decisions. But it’s what you do with it and where it takes you that counts.
Experian is known for combining advanced tools and techniques with expertise in credit risk to help you bring data to life and turn it from information into insight.
3. Constantly reframe your understanding of the next-best action for your customers
While large organisations are hardly known for their flexibility, the need to be constantly fine-tuning collection strategies is at an all-time high. Identifying the right communication channel for each customer and executing it at the correct time, via the most appropriate route, with the right terms, are all critical components of any successful collection strategy. But as repayment habits are continually evolving, selecting the most appropriate action for each individual customer is growing increasingly challenging.
Our advanced analytics can help risk and collections teams to evaluate a host of flexible strategies for successful customer collection.
When yesterday’s performance dictates how organisations think about crises today, we all rely on the ability to distinguish between hard facts and speculation. Data and insight can help you make confident decisions, so you can assess affordability quickly and easily. With a more calibrated view under your belt, you’re in a better position to understand an individual consumer’s ability to afford your products or services, and ensuring we provide the right product for the right customer.
At Experian, we invest in data and services which can help you to make better informed decisions with quick and easy access to an individual’s affordability. Find out more here.
5. Safeguard your customers with smarter fraud detection and prevention
Fraudsters are smart, relentless and indiscriminate. During uncertain times, you need make even more effort to protect your customers, your business and society from fraud. Our fraud prevention solutions find and stop fraud across business sectors and can be seamlessly integrated into your processes to minimise disruption to your customers.
The threat of fraud is a shared one and we work closely with industry bodies and other related organisations to reduce the impact on consumers, industry and society.
6. Prepare for a changed world by protecting online transactions
In our ever-evolving digital world, consumers from all walks of life now expect fast, seamless and convenient online experiences – whoever they transact with. While digital channels offer convenience to customers, they can also provide an easy route for fraudsters – especially during periods of turbulence and stress. Consistently delivering the right customer experience while safeguarding them and your business from fraud is essential.
Our FraudNet solution is designed to provide you with a multi-layer protection against online account takeover fraud. It allows you to recognise every device across every channel, providing the insight and capability required to identify suspicious activity and stop account takeover fraud before it impacts your customers.
7. Support small businesses during challenging periods
As foot traffic falls, small, independent and local businesses the world over are having to close their doors. Access to even more small business data can help ensure these closures are not permanent. Experian has already mobilised to help deliver a more complete view of every commercial customer – from SMEs, to micro-businesses to sole-traders.
Our Commercial Acumen platform gathers alternative data such as Open Banking and management account information, and combines it with credit history analyses, commercial credit scores and adverse financials to generate deep-dive insights into each business. As a result, you get the information you need to identify the appropriate products and services for each customer, enabling you to make better-informed lending decisions, quickly and fairly that can help support them through this difficult time.
8. Make way for agile customer management strategies
In a rapidly shifting landscape, automating and streamlining customer management and collections processes, will support recovery management initiatives and enable organisations to continually help rehabilitate customers, minimise the risk of exposure to bad debt and maintain revenue streams.
You can discover more about Experian’s customer management strategies here.
9. Use expert insights to forecast credit risk carefully
To help businesses interpret complex and shifting information, having advanced modelling capabilities at your fingertips becomes indispensable. Where expert opinion can differ on critical issues, combining lending policy and economic forecasts enables more forward-looking risk modelling. This union of the disciplines of credit risk and economics will help you meet continually evolving commercial and regulatory requirements and plan successful credit risk strategies.
10. Make the most of market insights and economic information
Despite periods of uncertainty, it’s still possible to pave the way for future business growth. Companies around the world are already using economic trend analysis, credit market insights and portfolio benchmarking to best-inform their credit risk strategies. This can include everything from new business acquisition, through to customer management and debt prioritisation. As the COVID-19 crisis changes our businesses in important ways, it’s an opportunity to understand the impact of changes in your own lending policies as well as how shifts in external markets and regulations may affect performance.
As the world acts to mitigate the impact of uncertainty, the need for businesses to up their resilience and adaptability will extend long beyond the trying times of today.