How to Modernize Decisioning with Automation and Real-Time Responses

Published: July 24, 2018 by Erikk Kropp

When a new customer wants to establish credit terms with you, the first thing they’re asked is to fill out your credit application. When you hand over a paper application, did you know you could be negatively impacting your revenue or setting a poor customer experience?  Some companies don’t. 

More than likely, your customer has filled out at least one digital application in the past.  The initial perception your application says about your company is that you’re out of step with technology — which may lead to them to wonder where else you may be lagging behind.  Digital applications provide a simplicity factor and by not offering one, your credit approval process is perceived to be more difficult, leaving the customer with more work to do —spending extra time writing their information by hand and returning the application — either by email, fax or in person.  Because many companies have already moved to a digital application, your pen-and-paper process sticks out to the customer — and not in a good way.

Not to mention, manually processing a paper application takes longer — often much longer — than a digital application. This means customers leave without a credit approval, giving them time to change their mind about their purchase or find a better deal — meaning you just lost a new sale. And even if they still choose to work with you, their relationship with your company starts out with a less than amazing customer experience.

After the paper application is completed, the workflow process is often time-consuming, error-prone and cumbersome. The time involved also means that your company waits longer to get the revenue from the sale. By using a manual process, your team spends hours on processing and decisions that could be better spent directly servicing customers or working on other initiatives to grow business.

Putting the credit application online for laptop, tablet or smartphone use

As customer experience becomes more critical for how businesses compete and differentiate themselves in the marketplace, companies will inevitably continue to move toward digital applications given the benefits.  Some companies include a link to their online credit application from their website, which lets customers fill out the application from anywhere with a computer, at any time they want.  Other companies operating physical storefronts will give customers a tablet with the application in digital format to fill out right then and there.

Companies with sales reps going into the field can also use the system for credit approvals at the customer site by simply handing their tablet or smartphone over to the customer. Because sales representatives now have the power to easily convert the sale on the spot, you can increase revenue and improve the customer experience at the same time. Furthermore, the satisfaction of your sales representative improves because you are giving them tools to help drive their success. BusinessIQ Mobile from Experian puts instant decisions in the hands of your sales team.

Automating the Decisioning Process

Some companies improve the application process further by automating credit approvals.  Real-time decisions give customers something they often expect — instant gratification.  Through the digital application, you can now extend credit and issue payment terms that work for your customer which prevents them from shopping around.  If a potential customer leaves your site or store without a credit decision, you could easily lose their interest and risk them never coming back.

When your customer completes and hits ‘submit’ on the application form, the automated decisioning process can initiate instantly.  Because the application is digital, the system can render an onscreen decision immediately to the applicant and submit a confirmation to their email address. Your employees no longer have to look at each application by hand — just those flagged by the system as needing a human touch.

The decision is based on rules and parameters you set up in the system’s decisioning engine for determining credit approval. Because different companies have different levels of risk — some are more risk averse while others are more aggressive — you can set up a decision policy based on the specific criteria that work for your company. This also means less friction between the credit department and sales because the credit policy is already preconfigured with clearly defined criteria.  This can help the sales representative to better manage expectations with their customers.

Improving the workflow

Your company likely already has an established workflow process for credit applications. With the way, many automated application processing and decisioning technologies are designed, you can leverage certain components and integrate them into your process as you see fit.  This enables added flexibility and customization when moving your existing process into an online format. Experian provides several standard workflows for customers to use as-is.  You can also quickly modify an existing workflow or potentially use API integrations to build automation into your existing processes and systems.

Modernizing the end-to-end credit approval process can feel daunting in the beginning. Start by identifying specific processes within the credit department that can be easily automated right away and that can drive quick, impactful returns.  By starting small, you can more easily implement and manage change over time.  As your business and stakeholders become more comfortable, you can continue to automate more pieces of the process to drive incremental returns.  Eventually, your company could have the entire credit approval process automated. No more paper applications and no more frustrated customers.

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The latest insight, tips, and trends on all things related to commercial risk by the team at Experian Business Information Services. Please follow us on social media.

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