Managing credit risk for improved cash flow in the digital age Nikki Dennis MICM Managing Partner/Co-Founder SalesCRED
We live in an increasingly complex and digital
Within the current credit risk climate, the timing
driven society. If you’re like most people, you
couldn’t be better to explore how this new and
spend on average 5.5 hours of your day looking at
emerging digital technology may be applied
your phone screen. Think about that for a second;
for more effective cash flow and collections
taking the average life span, that’s 17 years of your
management.
life spent on your phone! Yet despite this, digital receivables and collections technology is still very
And for those who question, is the market ready
much underutilised within Australia, and in fact,
for this? Let’s reflect on how ready for this we are!
around the world. At a time when we are facing emerging credit risk
Living in the digital age
from the largest quarterly and annual increase in
From the minute we wake up most of us are on
inflation we’ve seen in Australia since 2000. Not
our phones turning off our alarms and checking
to mention rising fuel prices from the ongoing
our news feed or messages. Digital communication
crisis in the Ukraine, labour shortages from the
is everywhere. We use our phones to check
continuing pandemic fallout, and recent figures
the weather so we can dress appropriately, to
from the Australian Energy Regulator showing
get us to work quicker by dodging traffic hold
average debt for gas and electricity rose 12% in
ups. We are emailed with updates on our child’s
the past year alone – it is essential that as credit
day at school, get reminded when our dentist
professionals, we review and keep abreast of new
appointment is due, when our account is going to
ways in which we can respond to, and better
be debited with the latest phone bill, and when our
manage these risks.
evening curry is being delivered. No wonder we are on our devices for roughly 33% of our waking
Ask many credit professionals what they think
life.
digital communication is and they will usually say SMS and email. But that is at its most simplistic
How many of us receive regular letters now or
and missing the real advantage of advanced digital
answer phone calls from unknown numbers? If
solutions. We now find ourselves on the brink of
you’re like most people, the answer is very rarely
an explosion in digital capability across the credit
or never. According to a recent study, 87% of
industry that incorporates AI, machine learning
people won’t answer the phone any more to
and other popular platforms such as whatsapp,
numbers they don’t recognise and Australia post
live chat bots, and conversational AI, to take
have reported over a 50% decline in letters being
communication with customers to the next level.
sent since 2008.
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AICM Risk Report 2022
