Customer Experience

The speed at which the world is feeling the impact of Covid-19 is unparalleled. Because of this customer affordability has shifted into the unknown and businesses are trying to react quickly to assess customer risk in a brand-new context, albeit a temporary one. We look at the five key areas businesses should be considering when it comes to customer affordability. 1. Looking to insights The last financial crisis taught us that the first line of defense for many organizations, large and small, is to move straight into proactive debt restructuring to reduce the volume of customers who would otherwise fall immediately into debt collection. This crisis is no different, but identifying those in hardship, restructuring debt at speed, and in line with restricted policies are where businesses should be focusing to successfully tackle this. 2. Keeping regulators front of mind As a result of the last downturn, many financial regulators are placing a much higher weight of responsibility on lenders to make fair and transparent lending decisions when it comes to affordability. Not just when it comes to new lending, but also how they act and behave within collections. These rules are not going to be relaxed, so it’s important that businesses continue to prove that they remain compliant. 3. Predicting what’s to come Anticipating arrears before they happen, and at speed, is fundamental to managing the restructure of debt effectively. Especially where traditional data sources provide less predictive value. For businesses without advanced and automated debt restructure or collections-based program to begin with, this is an opportunity to develop something that will carry them through this time of crisis and beyond. 4. Harnessing analytics and AI Thinking predictively means getting the right analytical capabilities or models in place, ideally harnessing Machine Learning and AI to get the fastest and best results. For larger organizations, this will mean having the agility to rapidly update and deploy existing models, and for the less mature, it will mean building this from the ground up (but quickly). Businesses will undoubtedly see their analytics teams overstretched during this period, so now is the time to reduce the manual load and invest in these capabilities. 5. Automation for demand control Making sure customers can deal with organizations digitally will be critical to maintaining customer experience. It’s just as important to ensure that channels are integrated and automated in the backend. Businesses are looking to omni-channel digital solutions to help feed new demand through the funnel without having the added complication of a restricted workforce. It has never been more important to automate. More on Decision Analytics

Awareness is key for both businesses and their workforce when it comes to phishing fraud. But in a world where digital engagement has suddenly ramped up a notch (or ten), it is becoming increasingly difficult to differentiate between what's real and what's not. Mike Gross, Head of Global Identity and Fraud at Experian, recently spoke to Jill Malandrino at Nasdaq Trade Talks about the key things to watch out for when it comes to phishing scams. Here's a round-up of what was discussed: New opportunities for phishing The global pandemic has opened up new routes for phishing scams. Fraudsters are great marketeers in a crisis, and they thrive on people's curiosity. From fake charity organizations claiming to be investing in Covid-19 related treatment to new government support schemes - if it sounds too good to be true, it probably is. Remote working Individuals are now forced to work from home but still have a responsibility to protect customer data. New processes have exposed gaps that fraudsters can exploit as there are typically fewer controls on home networks. Businesses must ensure that the right security is in place for their employees. regardless of the business size. Habits have shifted, and so have the fraudsters The pandemic will change the way we operate forever - how businesses enable remote workers, how consumers interact with commerce and how kids learn today - this is impacting our lives on the social side as well as the work side. Fraud will follow suit. Reacting to the crisis with a layered defense Phishing has dramatically increased, but phishing itself doesn't cause losses. It's the gaps in the controls - organizations may not have proper layered controls in place to defend themselves against these more sophisticated, or multi-channel attacks - that's what leads to the increases in losses. No one had a chance to prepare for this crisis - everything is different now than it was a month ago, from customer service, online demand, a flood of certain types of applications - businesses are not set up for the scale of demand. Listen to the full interview

Unlike your typical recession caused by a steady decrease in demand, today’s downturn was induced by the immediate mass closure of non-essential businesses. The frenzied pace that government and regulatory bodies have responded to reduce the impact on consumers with payment forgiveness or deferment programs has put a tremendous amount of pressure on lenders. It’s difficult to quickly understand the changes in credit profile of a previous solvent customer and to mobilize their operations teams to service these at-risk customers. Most companies but especially banks have been very proactive in digitally communicating with customers. They’ve been contacting consumers through email and posting messages to your accounts online offering to help. The problem will be when people start to experience financial difficulty, how do you support those consumers especially the vulnerable? Generally, the number of consumers who manage their debt month to month with low to no savings is the norm, that coupled with overall credit lines and debt utilization rates being at an all-time high creates somewhat of a perfect storm. With consumers facing unemployment or furlough at record numbers, the volume of people seeking hardship applications from their lender will skyrocket. According to the International Labour Organization, an estimated 2.7 billion workers, representing 81% of the world’s workforce, has been impacted leaving millions of workers vulnerable to income loss and layoffs. This rapid increase in demand is and will continue to overload Call Center operations who are already under strain and operating at a lower capacity. And really, aren’t we all? Call centers are staffed with people like you and me – working remotely or socially distancing, all the while juggling the needs of their families and communities.  And if it’s a lender who hadn’t yet made the digital transformation leap, these lenders could be putting additional pressure on systems that are difficult to access with a remote workforce. Implementing new software and operating rhythms in times of crisis is not ideal. Yet businesses don’t have the luxury of time and will need to evaluate their options and implement now. Here are 3 considerations for taking those first steps: Prioritize on-demand or cloud-first solutions for faster implementation Look for “as-a-service” options delivered in days versus months to help more customers faster Find operational efficiencies that support your employees and customers when it’s needed most Experian is helping businesses manage their at-risk customers whether they’re already in arrears or showing signs of payment stress for the first time. By linking digital communications channels to a collections platform and integrated decisioning environment, we’re helping address the significant increase in hardship demand with end to end treatment automation as a service. From the point of application, consumers drive the self-service interaction allowing businesses to quickly receive, accept/decline and process applications. Augmented with analytical insights for affordability and various types of propensity, businesses will better understand the actual financial position of a customer and be able to create a tailored treatment approach that’s sustainable. Whether short-term forbearance or true hardship is required, this can help reach more customers and free up call center teams to focus on more complex cases. It’s unlikely the economy will return to its pre-Covid conditions as rapidly as its declining, but your customers will trust your business if you were there for them in their greatest time of need.  We can help you stay connected with your customer while supporting them in a meaningful way through this especially difficult period.