Banks and consumer credit
It is often thought that knowledge of one's own clients comes from observation of the needs and motivations as being the real determinants of the consumer's behaviour.
In reality, socio-demographic and behavioural data which a Bank or Consumer Credit Company holds are a veritable goldmine for obtaining a clear profile of their clients, to construct reliable theories on their inclinations or risk probability to then direct them to a commercial strategy oriented to the client.
The real problem is not the lack of client data, but the recognition of the importance of the data we have and the will to invest to normalise it, to re-duplicate and organise it for an analytical process which will give us a full picture of our interlocutor.
The Marketing and Sales function deals in development potential while Risk Management deals with setting barriers against “bad payers” entering. Risk probability and inclinations are two sides of the same coin and it is only through the proper measuring and integrated use of these two aspects than one can effectively and profitably manage one’s own customer base.
We are currently seeing a notable increase in the potential market for the credit sector, along with high competition: banks, financial companies and credit card providers are trying to sell their products and are focusing on keeping their activations costs down and accepting higher risk margins, balanced by differentiated credit pricing. Fraud prevention on one side, and the prevention of abandonment and the “dormancy” phenomenon on the other, are the critical success factors to add to the need to measure risk probability and inclinations.