Optimus Credit Risk Management
Bad debt mitigation - Reducing financial exposure in your business
Credit managers face a difficult challenge in today’s marketplace, as the increased competition causes greater pressure to attract and obtain as many new customers as possible. The need to attain customers, however, should be assessed against the requirement to accept the ‘right’ kind of customer. If the customer defaults, the enterprise can face heavy losses; equally, turning down a profitable customer can result in the loss of potential revenue to a competitor.
The cost of bad debt (i.e. the non-payment of charges) can be heavy for any enterprise. These costs are not only the loss of revenue from customers who do not pay their bills - there are also the inherent costs of attracting new customers in the first place, such as advertising and marketing. These factors constitute a considerable monetary investment for an enterprise and highlights the true cost of bad debt.
It is important to continue to monitor subscribers throughout the lifetime of their account, so that credit managers can better make informed decisions about how valuable (if at all) the subscriber is to the business. Should you continue to offer credit to particularly poor payers? Could you offer additional or upgraded services to ‘good’ customers to boost revenue?
Optimus Credit Risk Management
Optimus Credit Risk Management assists enterprises to assess prospective customers for credit risk at application stage, providing valuable support to existing in-house screening policies and credit agency checks. It also enables enterprises to manage payment risk throughout the customer lifecycle by supporting the initialisation and subsequent management of credit limits. Optimus Credit Risk Management uses a hybrid of statistical and neural advanced modelling approaches, combined with rules and thresholds, specific to each enterprise’s precise business requirements.
Assessing potential customers
Optimus Credit Risk Management enables credit providers to assess each new prospective customer for creditworthiness. This is executed by using our neural predictive analytical models that are created using enterprise’s own historical data to ensure assessments are accurate. Scores are produced that indicate a prospect’s propensity to pose a credit risk, helping enterprises to make informed decisions about which customers to accept and on what terms.
Monitoring existing customers
Optimus Credit Risk Management enables credit providers to set initial credit limits that are individual to every customer. The system constantly monitors the outstanding debt of the customer against the credit limit, sounding alerts if a threshold is succeeded.
Built-in Link Analysis Module
Link analysis is crucial for preventing subscription fraud and bad debt. The Optimus Platform cross-references & matches individual fields of subscriber data with current/historical subscriber data stored on the database to generate scores and find any similarities between subscribers. An output is produced to show the matched accounts and how they are linked.
Optimus comes with a radically new business intelligence and data mining application. It enables users to carry out in-depth analysis and perform ad hoc queries on their customer and transactional data. The in-built data mining functionality provides users with full access to data within the Optimus Platform, as well as to relevant information contained within external databases and data feeds. Information is presented in single windows for quick access. Easy to use drop down lists, using logical expressions and set operations provides users with an easy way to enter search criteria to retrieve the required information.
Integrated Case Management - Insight
As well as providing data mining functionality, Insight offers a powerful case management environment that guides the process of case analysis, investigation and subsequent actions. Suspected cases can be prioritised according to their risk score (or other user-defined criteria, such as estimated monetary loss or rate of loss). Information can be routed between departments and requests can be made to external systems to perform actions against the customer being investigated.
Features and benefits
- Proactive risk management - Optimus Credit Risk Management is capable of monitoring any data element in the enterprise’s systems, e.g. usage, payment activity, call destination or velocity, payment type. This data can be monitored for change and, should the customer default on payments, it can be used to build models that flag up other customers who exhibit similar behaviour.
- In-house control - Enterprises can build and update risk models themselves, to avoid costly vendor intervention. Risk models can be altered as required to take into account changing market and business conditions.
- Exposure limits - The system provides the enterprise with the flexibility to establish exposure limits for each customer. The exposure limit is a flexible alternative to fixed credit limits that the customer cannot exceed. It can also be an internal limit used to trigger alerts so that immediate analysis can be done and customer contact initiated if necessary.
- Configuration - The system is fully configurable and enables control of the following: introducing new data, behavioural modelling, link analysis, case manager workflow, rules, behavioural profiles, neural analytical models, segmentation and special lists.
- Prepay prediction - The system can help manage a prepay programme by tracking the usage to the spending limit so that hotline forecasts can be generated. Over time, it can assist with the determination of more appropriate spending limits for accounts with regular payment history.
- Audit trail - The system provides a comprehensive audit trail, which includes data received, progress on cases and actions taken.