Enough is enough – pulling the trigger on automated decisioning

All too often as credit risk professionals, we don’t take the time to evaluate our credit policies because “that’s how it has always been done around here”. Unfortunately, this mentality increases days sales outstanding, raises uncollectable debt and prohibits us from identifying  good growth opportunities.  Reviewing your policies early and often enables credit risk professionals to  create more sophisticated rules around how to extend credit.

One way to establish a clear cut set of rules around your credit policy is to automate your credit decision making process. I know when some credit professionals hear the word “automation”, they run the other way. Typically, two concerns come to mind: 1) A computer is going to take my job away OR 2.) Credit automation is too expensive!  Neither of these is necessarily true.

Automating your credit policy simply allows credit risk professionals to focus on the important things that matter when making credit decisions. Ultimately – a good credit decisioning system allows good applicants to get automatically approved and the bad applicants to get automatically declined without getting you involved.  Your time is most efficiently spent on the accounts that need human intervention – applications that fall on the cusp of a decision. This analysis even a computer can’t do! 

Most credit automation tools have come a long way. The market now offers various ‘out of the box’ solutions depending on the level of automation desired by your company. Once a costly tool – now it’s a cost savings tool!

How do you know if your business is ready to automate your credit decision making process? Take this self-diagnosis test. If you answer “YES” to any of these questions – it’s time to pull the trigger on automated credit decisioning!

  • Is your credit operation decentralised with regional multiple analysts making decisions independent of one another?
  • Do you have problems auditing when and why credit limits have been adjusted?
  • Are you finding inconsistencies on how analysts assign out credit limits?
  • Do you think your credit analysts are spending too much time manually reviewing credit applications?

If you answered ‘YES’ to any one of these questions – automating your credit policy just might be the solution you’ve been looking for. So what are you waiting for? Pull the trigger!