Why businesses need to meet the challenge of digital acceleration
Steve Pulley, Managing Director of Data Analytics at Experian, shares his thoughts on operating in an evolving digital marketplace
The world of business and work has fundamentally changed. The Covid-19 pandemic has altered working patterns, and as a consequence, the trend of people accessing services and spending online has accelerated rapidly.
To meet the demands of this new world of working, and as countries begin to emerge from lockdown and economies begin to recover, businesses must adapt.
Methods can include everything from bolstering digital onboarding processes and fraud prevention systems, to deploying sophisticated decision and analytics solutions.
Companies are moving away from face-to-face customer interaction to virtual ones, so businesses must ensure they’re as prepared to operate in this evolving digital marketplace.
A global perspective
Experian’s newly published Global Insights Report surveyed more than 3,000 consumers and 900 businesses from around the world, including the UK, the USA, India, Japan and Brazil.
It reveals a snapshot of both consumer and business sentiment in these unprecedented times. More than half of those surveyed globally said they expect their online activity – such as using online banking and carrying out retail transactions – to increase in the next year, engaging with digital services like never before.
But of the businesses questioned, less than a third (32%) have made adjustments to their digital operations to satisfy this new demand, indicating there’s a lot more to do. There is still time, but those who fail to accelerate their digital transformation initiatives or integrate their data and analytics capabilities successfully to support their decisioning strategies, risk losing existing and new customers, a situation which businesses can ill-afford in these difficult times.
As part of this adjustment, fraud prevention must also be a priority. Knowing your potential customers are who they say they are is vital for digital onboarding and meeting compliance requirements. Pleasingly, some 80% of businesses said they already have a digital identity strategy in place to help them recognise customers and prevent fraudulent transactions. In comparison, 60% said they plan to increase their fraud detection budgets over the next year.
Only 32 percent of businesses have made operational adjustments to meet new consumer demands to date but are planning to make strategic adjustments to give consumers greater access to goods and services and manage customer relationships.
Businesses play a critical role in helping consumers and getting economies back on track. Now more than ever the integration of data, analytics and technology can enable businesses to quickly adapt decisioning strategies to minimize risk, preserve valuable relationships and remain fair and compliant.
From consumers needing short-term support like payment holidays to those facing longer-term challenges like unemployment, businesses are accelerating their digital transformation initiatives to address individual customer needs safely, conveniently and at scale.
Decisioning and analytics
The ambition to meet these challenges is one which all businesses face and decisioning and analytics can play a critical role. The integration of data, analytics and technology can help businesses adapt their decisioning strategies to minimise risk, improve the customer experience and better manage their customers and portfolio in a post-lockdown world.
This is crucial. For example, a fifth of global businesses (20%) said they currently lack confidence in their credit risk and collection decisioning since the pandemic began. Scorecards built upon historic data may or may not prove predictive of credit performance through the next part of the economic cycle. By exploiting accurate, rich and granular data such as affordability data, businesses can make better decisions and ensure they treat their customers in a fair and compliant way.
More positively, 60% of businesses said they plan to invest in their decisioning and analytics capabilities over the next 12 months to ensure they’re able to meet the challenge posed by the digital acceleration.
Covid-19 has brought consumers and businesses together online in a way which we have never seen before, a secular trend which will continue as global economies begin to recover.
With nearly two-thirds of global consumers (65%) stating that their country’s economy has not yet recovered from the pandemic, businesses must offer the services their customers demand. The challenge isn’t easy. By having safe, accessible and frictionless online services, companies can put their best foot forward and help our economies return to some sort of normality in the year ahead.
This was posted in Bdaily's Members' News section by Steve Pulley .