Navigating a new era of credit risk decisioning

New Zealand
New Zealand New Zealand
Consumers make most of their payments by internet banking
  • 74%
    BFSI
  • 70.5%
    TELCO
  • 54.5%
    RETAIL
  • 46.5%
    BFSI
  • 39.6%
    TELCO
  • 40.7%
    RETAIL
  • A higher percentage make payments via internet banking to banks and insurance companies, telcos, and retailers, respectively, compared to the regional average
  • Impact: Anti-fraud capabilities critical to the increased digital transaction frequency and customers’ trust in banks
Australia
Australia Australia
Consumers are most satisfied with the post-fraud service of banks and insurances companies
  • More than 70% satisfaction rate compared to 59.7% on average
  • Impact: Increased trust in BFSIs
Indonesia
Indonesia Indonesia
Consumers that encountered most fraud incidents in the past 12 months
49%
34.7%

AP Average

  • 49.8% have experienced fraud at least once compared to 34.7% on average
  • Impact: Overall anti-fraud capabilities need improvement
Singapore
Singapore Singapore
Consumers have the highest trust towards government
AP Average
  • 75.5% choose government agencies, compared with 51.7% on average
  • Impact: Trust of personal data protection is centered around government agencies
Vietnam
Vietnam Vietnam
Consumers encountered most fraud incidents in retail and telco during the past 12 months
  • 55%
    TELCO
  • 54.5%
    RETAIL
  • 32.8%
    TELCO
  • 35.2%
    RETAIL
  • 55% and 54.5% have experienced fraud at least once in retail and telco, respectively, compared to 32.8% and 35.2% on average
  • Impact: Overall anti-fraud capabilities need improvement
Thailand
Thailand Thailand
Most Thai consumers believe speed and resolution are severely lacking (response/ detection speed toward fraud incidents)
AP Average
  • 60.5% think it is most important, compared to 47.7% on average
  • Impact: Response time as one of key factors to fraud management to retain customers and gain their trust
India
India India as standalone
Consumers have the largest number of shopping app accounts in the region
India
  • Average of three accounts per person
  • Impact: Highest exposure to online fraud
Hong Kong
Hong Kong Hong Kong
The least percentage of consumers with high satisfaction level toward banks and insurance companies’ fraud management
AP Average
  • Only 9.7% are most satisfied compared to 21.1% on average
  • Impact: effective response towards fraud incidents to be improved
China
China China
Consumers are the most tolerant toward submitting and sharing of personal data
AP Average
  • 46.6% compared to the AP average of 27.5% are accepting of sharing personal data of existing accounts with other business entities
  • Impact: higher exposure of data privacy and risk of fraud
alert
Japan Japan as standalone
Consumers most cautious on digital accounts and transactions
50.7% Actively maintain digital accounts’ validity
27% AP Average
45.5% Do not do online bank transfers
13.5% AP Average
  • More than 70% did not encounter fraud incidents in past 12 months, compared to 50% on average
  • Impact: Relatively low risk of fraud

Lenders need data, analytics and automation to navigate a new era of credit risk decisioning

Lenders need data, analytics and automation to navigate a new era of credit risk decisioning

Through the Covid-19 pandemic, the role of data, analytics, and credit risk decisioning has taken on even greater significance than before. Consumers face uneven roads to recovery, with some ready to spend again and others still mired in pandemic-related financial stress. Businesses of all sizes also report their operations are in various stages of recovery.

 

Our Global Decisioning Report 2021 looks at how consumers are stabilising their finances and how businesses are returning to growth.

 

The research, comprised of three waves of data collected from June 2020 through to January 2021 among 9,000 consumers and 2,700 businesses across ten countries worldwide, reveals the importance of lenders prioritising digital transformation, and the role of advanced data and analytics in enhancing the customer experience.

 

The ebbs and flows of the pandemic are reflected in Australian consumer spending

 

Read full article

Experian

By Experian 08/12/2021

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2021 Global Decisioning Report
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Navigating a new era of credit risk decisioning

Learn more
  • 1 in 4 Australian consumers

    were adjusting their spending compared to 1 in 3 in October 2020

  • 1 in 10 Australian consumers

    were cutting back on discretionary spending, half the number reported 6 months prior

  • 33% of Australian consumers

    were finding bill payments difficult – a decrease from July 2020 (45%) and October 2020 (43%)

With consumer finances in a state of flux, navigating this varied credit landscape requires a deep understanding of customer needs on both ends of the spectrum. However, business confidence in the consumer credit risk management analytics models for example dropped 14% from October 2020. With only 58% of businesses feeling confident in their models, 75% were looking to either recalibrate and improve existing models or rebuild them from scratch.

 

Implementing data and analytics to assess financial health and risk profile

  • 86% of Australian business decision makers

    said they will be implementing on-demand cloud based decisioning applications this year

  • 83% of Australian business decision makers

    reported they are now looking to integrate an automated decision management solution this year

Recalibrating credit models is one thing, but lenders also need to rethink their data sources to better understand current customer profiles. The data inputs generated by the pandemic have impacted credit risk models and machine learning applications in unexpected ways. For example, widespread payment holidays and government stimulus programs may be masking customers’ true financial circumstances.

 

Businesses fast tracking digital transformation to meet consumer expectations

  • 9 in 10 Australian businesses

    reported having a strategy in place related to the digital customer journey, with 70% putting this in place since Covid-19 began

  • 72% of Australian businesses

    revealed that an acceleration to digital transformation made their business more reliant on data and insights

In the early stages of Covid-19 we vaulted five years forward in consumer and business digital adoption in a matter of eight weeks. The importance of a digital-first approach has become evident throughout the pandemic, with Covid-19 creating a seismic shift in the volume of online activity. 

 

The future, however, is more than providing online services. It’s about knowing your customers well enough to anticipate their credit needs and using tools to automate the process and reduce risk.

 

Online customer experience and credit risk management are more connected than ever before. Businesses need technology that supports the entire customer journey, from acquisition and onboarding to customer management through to collections.

 

Five digital investments businesses are prioritising the new era of credit risk management:

  • 1

    Implement new machine learning models for customer decisions

    Implement new machine learning models for customer decisions
  • 2

    Increase digital acquisition and engagement

    Increase digital acquisition and engagement
  • 3

    Understand their customer base (affordability, value and behaviour)

    Understand their customer base (affordability, value and behaviour)
  • 4

    Automate customer decisions

    Automate customer decisions
  • 5

    Increase value of existing customers

    Increase value of existing customers

Download the report to get more consumer trends and find out what the future of decisioning means for businesses looking to return to growth.

Download Report

 

If we can assist your business in navigating a new era of credit risk decisioning, please get in touch with us using the form below.

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