Arrears Foresight
Enquire nowReduce bad debt and support your customers through greater insight
The economy is fluctuating to such a degree that without the proper data and insight, trying to plan accordingly is a nigh on impossibility. The UK economy shrunk by more than a fifth over the first half of 2020. How can you help your customers before they become delinquent?
Lenders need to be proactive in planning for potential spikes in arrears. You need the data to be able to allocate resources where they are most required.
Through Experian’s Arrears Foresight tool, we can provide you with a granular view of your portfolio. Using variables such as unemployment indicators (at a regional and sectoral level) and income shock, we can help clients identify vulnerable customers before their financial situation worsens.
"Experian has helped us better understand the financial situation of our customers. This insight has helped inform our support and communications strategy to help those individuals worst affected by the pandemic. Experian's data and insights have supported BMW Group Financial Services ability to better navigate the uncertainties brought about by COVID-19."
Ben Stewart, Credit Risk Manager from BMW Group Financial Services
Benefits
Identify and support your vulnerable customers
Personalise your communication and collections strategy based on an individual’s financial situation to garner the best results.
Allocate resource where it’s most required
By knowing which customer segments within your portfolio are likely to go into arrears, you can assign resources in advance.
Reduce bad debt
By taking pre-emptive action before a customer’s financial situation deteriorates, you can mitigate your credit losses.
What is Arrears Foresight?
Our Arrears Foresight tool brings together unemployment forecasts, the latest credit insights on the UK market, as well as traditional credit risk indicators in the form of Delphi for Customer Management (DCM) scores. We also have an award-winning Economics team available to help you better understand future trends and scenarios.
We segment your portfolio based on a number of variables and then model their risk exposure. This is presented back to you via Tableau where we use a red, amber, green status to visually indicate where your focus should be. This can be done at a portfolio, regional or sector level. You’ll also get an overall probability of default as well as the volume and value of arrears predicted within a given portfolio.
Features
Income Shock
Customers experiencing a significant reduction in income are more likely to default. The ability to identify those worst affected can help shape any pre-emptive action.
Emergency Payment Holiday Indicators
Emergency payment holidays can be a precursor to delinquency. Identifying these customers can help inform clients’ communication strategies.
Unemployment Risk Indicators
Being able to identify customer segments at risk of unemployment can help clients better forecast potential losses.
Credit Risk Scores
These scores help you identify potentially risky customers.
Economic Scenarios
Stress testing against possible future economic scenarios will help you better plan and prepare.
Segmented Risk
We can provide insight into who your most vulnerable customers are - at a portfolio, regional or sector level. This granular detail will make it easier to allocate resources where they're needed most.
Would you like to learn more?
Estimate the volume and value of future arrears
Read the thoughts of our Chief Economist, Mohammed Chaudhri, on how the pandemic is affecting the UK credit market.
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Discover how your business could benefit from Arrears Foresight
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