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Credit Management 3.0

We are now starting to see a shift in how credit management is perceived by organisations.

At one time, credit management was viewed simply as a functional cost centre – dare we say it, a ‘necessary evil’ and a barrier to sales. Today, its role is far-reaching, encompassing the development of strategy and commercial policy, far beyond the original remit of sales ledger management or cost containment.

From the viewpoint of a progressive organisation, credit management involves sophisticated (order to cash) processes to drive effective working capital performance. The influence of technology has extended to developing ever-more advanced credit-based propensity models and the provision of enhanced data analytics to enable prospect targeting as well as performing a vital customer service role, culminating in an enhanced customer journey and experience.

Certainly, what was once science fiction is fast becoming reality. We are already embarking on a new era. Let’s call it Credit Management 3.0, the shift from the ‘Back Office’, to the ‘Enterprise Solution’, to the ‘Connective Ecosystem’, involving a digitally enabled collaboration between clients, credit controllers and customers and new models of credit control delivery.

We are already seeing Artificial Intelligence (AI) and machine learning being adopted by the financial services industry to assess credit and data quality, enable fraud detection, price and market contracts, deliver predictive and propensity models and automate client interaction.

Those credit controllers and managers who develop superior capability in managing all of these elements in this new connected environment will clarify and build their value to the organisation. Many credit management professionals who view the receivables management and collections process through the eyes of a CFO or business owner for example are already seeing the benefits of a Virtual Credit Control solution, particularly where this is backed by real-time credit control and query resolution functionality. Visibility™ is a great example of how cloud-based technology can help drive client / credit controller interaction, connecting policy, people and processes seamlessly, with online portal reporting, live feeds of chasing activity, automated provisioning and forecasting cash on promises.

In turn, this blend of high tech and high touch interaction enables the relationship between the credit control team and the customer to become even more positive, with a focus on proactive account management. Underpinning this, is a commitment to professional education and training to create a firm foundation which will power the future of the credit management industry.

We would predict that we will see more transformational changes within the industry in the next two years, than the credit management industry has experienced in the past twenty, with radically different operating models using cognitive intelligence and smart, digitally integrated processes. However, there is a very real danger of losing sight of what really matters in the glare of new technology, the relationship with the customer. And that is where human intervention in the form of Virtual Credit Control really does shine.

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