Digital is changing customer engagement as boardrooms predict a shift from ‘business as usual’, explains Simon Russell, MD of Experian South Africa. Credit Bureaus are positioned to help unlock the power of data.
The traditional business focus is dead. Decision-makers are finding themselves at the centre of prioritising and driving transformation throughout their organisations. A recent study, “Winning the Customer Era” by Forrester and commissioned by Experian*, found that three out of four CEOs and senior business leaders predict that traditional business will be obsolete in the next five years. But – are the majority of boardrooms ready?
Global data flows have increased rapidly to the extent that ‘information at your fingertips’ has become a reality in a matter of nanoseconds. It is in this ‘always on’ and digital disruption era – involving a mass of data and analytics – that organisations across the globe, including in South Africa, are having to shift away from ‘business as usual’. The study reveals that the majority of boardrooms concede that they are far from ready to meet the digital challenge.
Central to the shift is the digital-savvy customer. In a competitive environment powered by winning and retaining customers, having a strong customer-centric strategy – founded on a holistic 360° view of the customer – is pivotal to any business’ success.
Unlocking the power of information and harnessing data contributes to greater business prospects and opportunities. These can help to build a strong foundation of knowing and understanding customers – a function that has become all the more important in today’s 24/7 hyper-connected world where a multi-channel approach towards customer engagement is the norm.
A deepened, single view of the customer is the ‘next frontier’ for creating personable, meaningful human-to-human interaction. Perhaps easier said than done, this is still a challenge for many as only 40% of South African respondents had a single view of the customer – lower than the EMEA average of 45%.
Customer insight is central to the success of customer management strategies to maximise customer experiences and value across the entire customer credit lifecycle – from customer acquisition to debt collection and fraud protection. To this, 81% of EMEA respondents in the Experian study viewed customer insight as a top business imperative while in South Africa, the need for customer insights was rated higher at 85% with analytics (80%) identified as the other critical priority. All of these have become even more critical in industries such as retail, telcos, financial services and banks where the digital-savvy customer leads.
Connecting the unconnected’ by linking the data dots and leveraging the full power of data, analytics and technology, together with the use of advanced automation are vital in today’s digital world where getting the customer’s attention and maximising their integration into the business’s data flows needs to happen in a matter of seconds. These help to optimise decision-making and boost customer growth potential exponentially. Worryingly, many are unable to accurately transform data into rich insights with 71% of the respondents admitting to lacking knowledge and skills in this regard.
This has all led to additional responsibility being placed on traditional credit risk departments with a shift towards recognizing the critical role of data and analytics in becoming more customer-centric, and real-time decisioning as vital to delivering a better customer experience. It is within this context that credit providers are requiring far more from their credit bureau than just credit data, and need additional support in terms of the ‘data to decision’ disconnect – embedding data and analytics throughout the organization across the entire customer credit lifecycle.
A deepened focus on the customer
The role of the modern credit bureau is to combine data, analytics and technology to enable credit providers to drive better, faster and consistent customer experiences across all customer touch points, anywhere and at anytime. Realtime and consistent decisioning will mitigate losses and manage risk, as well as positively match customer expectations. With greater customer insight, strong trust based relationships can be built – and current and future risks minimized.
With the proliferation of data available both internally and externally, data from multiple sources both traditional and nontraditional, as well as multiple types of structured and unstructured data for better decision making, organisations must use advanced analytics capabilities and leverage advanced automation to unlock the actionable insights with will enable a friction free customer experience.
Advanced analytics will be used to improve customer segmentation, enabling companies to better understand customer profitability and lifetime value, whilst also opening up big data. Those organisations that incorporate analytics into their organisations will benefit from a customer-centric model that pays off in the long term.
It is with this growing need in mind that new technologies are emerging to amplify the power of data and analytics. One such example is Experian’s DataLabs. In existence since 2011, these labs have expanded due to its success with helping businesses solve strategic marketing and risk-management problems. Using advanced data analysis process, research and development – and run by data scientists – these labs are able to gather new customer insights, helping them to be innovative and enhance their business operations.
Creating a frictionless customer experience
Knowing your customer is not only a business imperative; it is also critical for fraud prevention. Advanced data and analytics are also reshaping how modern fraud prevention is done. The ability to utilise data and analytics to authenticate customers and fight fraud – without compromising on the customer experience – is gaining ground for a frictionless customer experience.
According to the Experian study, 54% of the EMEA respondents reported longer sales cycles due to fraud. South Africa is not immune to this with 70% of South African respondents reporting that their current fraud prevention was ineffective. Furthermore, more South Africans are also realizing the negative effects of fraud such as having to reject potential customers due to inefficient and ineffective fraud prevention barriers.
Stopping fraudsters in their tracks through advanced technologies for sophisticated fraud detection is one way of solving the issue. Another modernised approach is fighting this crime collectively as an industry. Using real-time credit application data and fraud intelligence applied across varied industries and a range of customer products, such as loans, asset finance and mortgage; organisations are able to collaborate for earlier, non-competitive, fraud detection. The National Fraud Prevention Solution introduced by Experian has been hugely successful in this effort and continues to engineer innovative ways to address this crime.
Transforming our business
In a world of habitual change, it is essential that all businesses keep pace with the market’s demands. As a global information services company, change – defined as modernisation in a digitally disrupted economy – we believe this begins with data.
This starts with empowering and equipping our customers by unlocking the power of data to help with their decision-making, improving their customer reach and experience while ensuring they are protected against threats such as fraud. As such, we are able to share practices that will help customers to fulfil their business ambitions, build new relationships and ultimately transform their business models from traditional to digital – a business priority that has been identified as critical for South African and global businesses in the coming years.