INSIGHTS: CREDIT MANAGEMENT Tech drives safer, faster credit decisions

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Digital solutions help to enhance the customer experience

Multiple converging factors are driving the digital transformation agenda in the lending space as credit providers look to unlock greater operational efficiencies and meet evolving consumer demands.

In the prevailing macroeconomic environment, embracing digitalisation has become a necessity to accurately assess risk, as factors such as rising interest rates, higher inflation, low economic growth and record loadshedding severely impact consumers and businesses.

Moreover, credit providers need to respond to shifting consumer expectations around customer experience and engagement to improve responsiveness and gain a competitive advantage over technology adoption laggards.

“Less digitally savvy organisations will struggle to keep up with those that have already embraced digitalisation to improve the accuracy of credit decisioning and streamline the application process, says Mark Wells, Chief Customer Officer at Experian Africa.

A significant proportion of businesses seemingly understand the important role investing in digital capabilities will play in future-proofing their operation.

According to Experian s 2022 Business and Consumer Insight Report, research conducted by Forrester reveals that 69% of business respondents deemed investing to digitalise core business processes as a critical or high priority. Digital solutions help reduce the time to decision to enhance the customer experience and provide more personalised service while also reducing the risk of fraud, which is invaluable to organisations at a time when fraudulent activities and cybercrime are increasing globally.

On the front end, factors such as the simplicity of the application process and providing better security are becoming increasingly important to business success, as 58% of consumers abandoned an application in the past year due to the amount of information they needed to input, and 63% were concerned about fraud when interacting online, according to the Experian report.

Moving from a manual process to a fully digital onboarding process can create a smoother, more personalised and quicker experience that can also protect customers against increasingly sophisticated fraud, adds Wells.

For example, Experian s research found that 64% of businesses identified reducing friction around verifying customer identity as a top business priority. Our study found a simple process was more important to consumers than the speed of access to funds and the security of the provider, and was more important than ensuring they could afford the repayment plan, he says.

The industry is also witnessing a shift from using individual technologies and operational capabilities to applying a combination to consumer journeys in the right sequence, says Ayanda Ndimande, Business Development Manager of Retail Credit at Sanlam. This is done to achieve compound impact and deliver a good client experience. For example, digital technology platforms can provide consumers with access to their credit report, educational content, a credit coach for guidance on their credit management journey, debt rehabilitation and access to other financial planning solutions, explains Ndimande. The aim is to empower consumers to understand and manage their credit effectively.”