Local retailers can now ensure compliance with both the Affordability Amendment to National Credit Act (NCA), and the Protection of Personal Information Act (POPI) thanks to a new solution from Intervate, a T-Systems company.
As a multi-award winning, Microsoft Gold Certified partner, Intervate has extensive experience with South African retailers and the challenges they face when extending store credit to customers.
With the world-class Kofax Total Agility suite as underlying technology, Intervate can assist retailers to improve the quality of their credit scoring, enhance the account opening experience for the customer and ultimately ensure responsible lending.
Retailers are also able to securely expose the credit application process directly to customers – enabling them to complete applications from the convenience of their homes, or their smartphones.
NCA Affordability Amendment: Promulgated in March 2015, this new amendment is designed to prevent the use of forged documents (such as bank statements) and deliberate under-estimation of household expenses by consumers. With South Africans becoming increasingly indebted, the amendment forces more stringent credit scoring requirements on lenders.
POPI Act: The Protection of Personal Information Act, which is yet to come into effect, will govern the collection, storage, usage, sharing and destroying of an individuals’ personal information.
Both pieces of legislation include severe penalties for non-compliance. If the NCA is contravened, credit licenses can be revoked, fines of up to 10% of annual turnover can be levied, plus the costs of associated reparations incurred. Violating the POPI Act could see organisations paying up to R10-million in fines, per incident.
“The NCA amendments have extremely positive intent: to ensure financial stability for individuals and the economy in general. However, many retailers are concerned with the increased burdens and risks,” notes Marc Fletcher, head of marketing and sales at Intervate.
“When we add the introduction of POPI to the mix, many retailers will have to make wholesale adjustments to their customer on-boarding processes. Our solution is designed to address both the NCA and POPI requirements in one fell swoop.”
The Kofax Total Agility Solution, delivered by Intervate, offers the following key benefits:
* Faster, more accurate credit application and credit scoring processes (compliant with the NCA);
* Conformance with information security requirements outlined in the POPI Act;
* Higher quality debtors books with less impairments and write-offs[
* Exposing credit application services to customers – via online forms and document uploads;
* Integration with any back-end workflow processing systems currently being used; and
* Full lifecycle management of the customer relationship.
The solution is able to ‘learn’ certain key indicators on, for instance, a bank statement.
So when assessing affordability, a direct debit for a medical aid premium would be automatically classified into a certain category, as would a repayment to a vehicle finance house, or the card-swipe for a purchase at a supermarket.
This auto-populates a credit scoring application form, ensuring that retailers get an accurate view of an individual’s monthly household expenses. If something about a particular document doesn’t match certain expectations, it would be funnelled into an exception queue – where the retailer’s staff can assess the document for validity.
“While the initial impetus behind adopting automated solutions may be regulatory compliance, we expect that retailers will very quickly start seeing the business benefits as well – including better quality credit, shorter queues for in-store applications, and enhanced customer experiences,” concludes Fletcher.