Credit Management December 2019

ASK THE EXPERTS
WHAT ROLE DOES TECHNOLOGY PLAY
IN THE ONBOARDING PROCESS?
SHARON: “Technology helps to ensure
the quality and maintenance of customer
data, and also means our time is spent on
the value-add analysis/workflow. As well
as looking at the manual credit requests,
the team also deal with risk mitigation
for existing customers when there has
been a decline in creditworthiness and
they spend time on portfolio analytics,
looking at the credit exposure/quality of
our portfolio as a whole.
ROB: “A couple of our manufacturing
businesses now have e-commerce
application facilities, and for these
customers we have an automated
decisioning tool in conjunction with the
agencies that allows them to be accepted
immediately, accepted with conditions
(e.g. deposits) or rejected for further
investigation via the credit team. We
also have a workflow tool – that allows
the limits to be approved through an
electronic process.”
WHAT CHALLENGES DO YOU
ANTICIPATE IN THE FUTURE?
SHARON: “There is no doubt we are
heading into a more uncertain economic
environment with Brexit on the horizon.
In the last 12 months there have been
some large failures in sectors like retail,
construction and manufacturing. If there
is an economic slowdown then we are
likely to see an increase in delinquent
debt. For us, the key thing is to try to
be as proactive as possible to ensure we
monitor our highest risk customers, stay
abreast of industry developments and
spot trends.”
ROB: “Firstly, increased uncertainty in the
market, so credit risk reviews take on even
more importance. The appetite for more
automated and e-commerce solutions
is not going to slow down. Therefore, it
is vital that we stay current in terms of
how we can support the onboarding of
customers in as smart a way possible while
balancing the needs of risk management
and commercial support.”
WHAT ARE YOU PLANNING TO SOLVE
THESE?
SHARON: “We had to invest in building
our portfolio reporting capabilities which
also meant we had to move away from
Excel based time-consuming tasks to a
more robust solution. The objective was to
improve efficiency, consistency, accuracy
and value of the reporting.
“We now operate a Python-based
reporting tool that is integrated with our
systems. Running our monthly portfolio
data now takes half a day, compared to 10
days previously. We can now analyse our
risk in depth with improved and accurate
reporting.”
ROB: “Saint-Gobain is very keen to
develop more automated, digital solutions
and credit management needs to continue
to embrace this. The development of
more enhanced score predictor tools
in conjunction with the credit agencies
is an area of focus for this. Also, the
development of the e-commerce account
onboarding offering. This isn’t the
solution for all of our new customer base,
but I do believe there are opportunities to
expand this offering.
“Our focus continues to be pro-active
as opposed to reactive management of
risk by ensuring we are receiving regular
management information from our new
customers so we can spot adverse trends
and act on them quicker than simply
having to rely on published financial
information.”
WHAT DOES BEST PRACTICE LOOK
LIKE?
SHARON: “It is not just the onboarding
and the initial credit check that is
important but the ongoing monitoring of
the credit quality of our customer base.
We review our largest customers annually
or sometimes more frequently. We also
ONE company to address some of
the issues around quick and effective
client onboarding is Royal Mail
Group. It has a dedicated Robotic
Process Automation (RPA) team in
Chesterfield that has developed a
robot called CRAIG which stands
for Credit Referencing Automated
Information Gathering. CRAIG was
developed two years ago and now
onboards about 300 customers a week.
The process begins with CRAIG
checking a shared folder every hour
from 9-00am until 5-00pm. If it detects
a new spreadsheet, it opens it and
checks the company registration on
Companies House and runs a report
on Experian. “It then scrapes the
data and populates the spreadsheet
with the details,” says Darren Leech,
Head of Group Credit Risk, Royal Mail
Group.
“Based on these details and the
Delphi score (an analytical tool
own and operate an active watch list of
our highest risk customers.
“We have spent a great deal of time
building up our portfolio reporting
capabilities. As trusted business partners
to our commercial team, we strive to
provide forward looking management
information that supports the business
strategy. Ultimately, we strive to support
the company’s growth strategies while
ensuring an acceptable level of risk.”
ROB: “Close business relationships with
key stakeholders – gone are the days of
the ‘them and us’ culture between credit
and sales, so working as a collaborative
partnership and where there is any dispute
between the teams, working together to
find a compromise solution that works for
the business and customers.
“Keeping credit policies current to
reflect the changing marketplace (i.e.
ecommerce ordering). Embracing new
tools and technology to spend less
time on administration and more time
on value added risk management are
all part of best practice. “Opening up
career opportunities in risk and credit
management through investing in skills
– we are particularly focused on the
Government apprenticeship schemes so
that credit management becomes the
career of choice.”
Sharon Noland is Credit Risk Manager at
Gazprom Energy and Rob O’Neill is Head
of Credit Management at Saint-Gobain.
designed to highlight the strength,
performance and ultimately the
creditworthiness of each company in a
single score ranging from 0 to 100 with
the lowest scoring companies carrying
the highest risk), CRAIG recommends
a credit limit. It then completes
the onboarding form and packages
everything up for the sales team.
“A process that used to take more
than 10 minutes is now completed in
two to three minutes. CRAIG is able to
complete the work of two people that
have been redeployed to tasks that add
more value.
“CRAIG is currently only able to
work on limited companies accounts
but we hope that it will soon be able
to automate the onboarding of sole
traders accounts too. The RPA team
are also working on robots that can
automate more areas of the business
such as account set up, operations and
even HR,” Darren concludes
The Recognised Standard / www.cicm.com / December 2019 / PAGE 29