The pressure put on Australian businesses to more heavily invest in technology in light of the COVID-19 pandemic has many ready to commit to ramping up automation within their organisations, according to research from Experian’s Global Insights Report.
This carries even more significance for the lending sector, as banks struggle to adequately manage customers’ ongoing payment deferrals; APRA figures have shown the total value of deferred home and business loans reached $274bn by the end of June.
Given the fact many lenders have adopted a “largely manual response” to the task of handling these deferrals, their onshore teams are being crushed by the workload due to disruption of offshore call centres services, which has taken a toll on the quality of customer service provided, as well as caused significant delays.
Before the pandemic, the wait for home loan approvals was as low as one week. Now, that length has been multiplied many times over and currently sits around 8 weeks, according to broker reports.
Experian’s research also found around double the number of Australian consumers are struggling to pay mortgage payments, credit card bills and utilities currently as compared to before the pandemic.
“Pressures such as bushfires, flooding and now COVID-19 have intensified consumer need for financial support. Meanwhile lenders are facing significant disruption to their usual processes, and are being challenged to remodel risk and creditworthiness in response to our changed circumstances. Automation will be a key asset for those looking to manage this impact quickly and efficiently,” explained Mathew Demetriou, GM of decision analytics at Experian Australia & New Zealand.
“Cloud-based solutions are becoming an increasingly useful tool for improving online experience, accelerating speed to market and contributing to the easing of operational cost pressures; all of which is business critical right now," he added.
Close to a quarter (22%) of Australian businesses have indicated they are looking to implement cloud-based decisioning solutions to help manage customer credit risk and credit worthiness.
To date, just 51% of businesses in the region have an automated credit decisioning process from start to finish, according to earlier research from Experian’s Optimising Originations report.
However, even with the zeal to further embrace technology in the future, 86% of the businesses surveyed indicated concern over their lack of historical data impacting the performance of analytics, with others voicing concerns around the constraints they face when using analytics to inform everything from recommending a product or offer (57%) to approving an offer of credit (54%) and declining an application for credit (47%).
As such, over half (55%) of those polled are looking to explore alternative data sources, invest in customer behavioural profiling techniques and even directly ask customers to contribute more data.