3 in 5 Australian businesses set to invest in analytics to automate credit decisioning as economic uncertainty prevails
New research findings from Experian’s Global Insights Report has revealed Australian businesses are committed to investing in automation to better respond to current customer needs. This follows pressure on lenders to manage ongoing payment deferrals as the impact of the pandemic continues to rock the economy. Much of this largely manual response has been handled by swamped onshore teams due to disruption of offshore call centres services, which is impacting customer service and causing delays.
The total value of deferred home and business loans reached $274bn by the end of June according to the latest APRA figures. The wait for home loan approvals has also risen from a pre-pandemic low of one week to a current 8-week turnaround according to local brokers.
Around double the number of Australian consumers are struggling to pay credit card bills, utilities and mortgage payments currently vs. pre-pandemic the report found. What’s more, 83% of Australian consumers said they would give companies less business if they felt they were treated unfairly, further compounding the pressure on lenders to respond to ongoing financial hardship with speed and accuracy.
It’s promising to see businesses responding by committing to investing in analytics over the next 12 months. This is a priority for 61% of Australian companies, with close to a quarter (22%) also looking to implement cloud-based decisioning solutions to help manage customer credit risk and credit worthiness. Just 51% of businesses in this region have an automated credit decisioning process from start to finish, according to earlier research from Experian’s Optimising Originations report.
However, 86% of the businesses surveyed believe a lack of historical data could impact the performance of analytics. Many also indicated they face constraints when using analytics to inform everything from recommending a product or offer (57%) to approving an offer of credit (54%) and declining an application for credit (47%). To solve this, over half (55%) are looking to explore alternative data sources, invest in customer behavioural profiling techniques and even asking customers to contribute more data.
“Cloud-based solutions are becoming an increasingly useful tool for improving online experience, accelerating speed to market and contributing to the easing of operational cost pressures; all of which is business critical right now,” commented Mathew Demetriou, General Manager of Decision Analytics at Experian Australia & New Zealand.
“Pressures such as bushfires, flooding and now COVID-19 have intensified consumer need for financial support. Meanwhile lenders are facing significant disruption to their usual processes, and are being challenged to remodel risk and creditworthiness in response to our changed circumstances. Automation will be a key asset for those looking to manage this impact quickly and efficiently.”