Collections are critical in the current credit environment, Experian SA tells credit providers
South Africa, 12 November 2013 – According to the latest Experian SA data, the country’s unsecured lending market continues to grow but at a slower rate, whilst at the same time there is evidence of increasing default levels of unsecured credit.
Combined with upcoming legislative changes, Experian warns credit providers that this is likely to further impact stress on them and highlights the need to think about optimisation of collections strategies and maximising their return on investment.
Speaking at the 2013 Consumer Credit Southern Africa Conference in Gauteng recently, David Coleman, Head of Analytics at Experian SA talks about how the South African credit industry is set for a number of regulatory and legislative changes in the coming months. These include the proposed Removal of Adverse Credit Information Project that was recently approved by Cabinet and draft amendments to the National Credit Act which details the new affordability guidelines.
Additionally, a number of industry indices indicate that the number of South Africans with a deteriorating credit health is on the rise. Macroeconomic data indicates that household cash flows are weak to negative and price inflation from the weaker Rand is offsetting any income growth.
“As many consumers are facing increased financial stress and continue relying on credit to meet their general living costs, having an effective strategy in place to determine which customers are likely to default in the longer term is not only necessary for maintaining long term profitability but for improving customer service and lowering attrition,” Coleman said.
While some organisations resort to increases in head count to support their collections activity, smarter organisations utilise their insight and knowledge to improve collections, reduce roll rates and diminish write-offs.
“The collection of overdue accounts and recovery of unpaid debt is a critical component of every major credit granting organisation. The ability to recover monies due and manage risk effectively is a key component of the performance of every business,” said Coleman.
Experian has built a strong set of end-to-end services that deliver key collections needs such as segmentation, skip-tracing, account monitoring, decisioning and case management through the integration of data, analytics and software.
The company helps organisations improve their collections results through the more intelligent application of data and technology. Experian’s approach allows businesses to maximise the effectiveness of their collections operation by adopting a low risk strategy and requires minimal IT resource while leveraging Experian’s comprehensive data assets, analytical expertise and extensive collections knowledge.
Managed decisioning services for collections enable organisations to employ collections resource more efficiently, and focus on the collection of debt using industry insight and expertise.
Experian South Africa (Pty) Ltd
+27 11 799 3434
+27 11 506-7333
Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2013 was US$4.7 billion. Experian employs approximately 17,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com.