“More than half of risk experts say their organisation can’t reliably identify a customer is in financial stress until they miss a payment.”
Risk Radar Report 2022
Whether a person is in hardship, or facing hardship, it is critical that credit providers offer multiple channels of support, including self-service options. For example, asking for support through digital channels is often less confronting than speaking to someone over the phone.
Credit providers who are able to understand the preferences of a customer can create a far more personalised service. For those consumers uncomfortable with addressing their financial position altogether, having their credit provider proactively monitor for change and reach out to discuss support options when signs of financial stress arise can make a difficult conversation far easier. This helps to reduce the friction when addressing financial stress, which in turn, can help put people on the path to recovery from hardship more quickly. Once the customer’s capacity to pay improves, an organisation can then discuss manageable repayment options and improve collections success.
Our latest Risk Radar report found that:
- 83% of risk experts agree that the current operating environment has seen higher risk factors for consumer defaults.1 and
- 100% of risk experts surveyed say it’s likely or very likely customers will experience increased levels of hardship and defaults in the next 12 months.
The report revealed that while risk experts are focussed on customer acquisition, they’re balancing prioritisation with customer management. In particular focus is management of hardship and collections – an increasing risk for customers and lenders in the current inflationary economic environment with rising interest rates putting greater costs of living pressure on consumers.
‘Experian have a world class team and they use their experience and expertise to help build and deliver solutions that take the capability of our collections to the next level.