HighRadius teamed up with CCR Magazine and senior Credit Risk Managers to debate the changing role of the Credit Risk function and the importance of striking the right balance between AI technology and human interaction.
In a recent survey conducted by Microsoft, 90% of consumers expect a self-service capability when dealing with a company. We want to find answers to questions ourselves. We want to solve problems on our own and we want to complete tasks or make transactions without any outside input.
Research shows us that if we don’t have access to features such as FAQs, self-checkouts, chatbots, and customer service portals, 59% of people would walk away and find another company that do offer these types of self-service capabilities.
The introduction of similar self-service portals in Finance has resulted in organisations getting paid faster and increased customer satisfaction.
Controller retention has been a huge challenge since the pandemic. Overloaded with admin work, Credit Risk teams are struggling to maintain the level of customer service in place before the pandemic.
By leveraging technology to automate mundane tasks, employees can spend more time upskilling, improving systems, and talking to customers directly to get a better understanding of their needs.
Automation also helps minimise operational costs, freeing up personnel to perform higher-level tasks which add value to the company. With the rapid growth of e-commerce, automation can enhance human interaction and decision-making so you can quickly shift your team’s focus to higher-value accounts.
Each customer you have is a different individual. They have their own needs, wants, and preferences for interacting with you. The most effective way to increase customer satisfaction is to look at their unique communications preferences.
Some consumers prefer interacting on social media, others prefer email or telephone follow-up, Communication is as varied as the consumers and industries you deal with and adapting to each one takes understanding and the ability to pivot effectively.
Once you understand your customer’s contact preferences, you can leverage technology to support these interactions. For example, using a dialler solution that ensures every outbound call connects can improve hit rates.
Segmentation can also be a key differentiator, allowing you to specify and apply preferred correspondence such as mail, telephone calls, or reminders.
Leveraging AI to determine preferences can improve customer service but organisations must strike a happy balance. Attendees shared examples where AI can have a negative impact when the solution decides the next action for the collector in every customer interaction, impacting accountability and morale for the collections team.
However, human interactions with customers during the pandemic has resulted in better customer service and helped Controllers build lasting relationships with clients.
Technology has an important role to play in supporting the collections strategy and making contact channels effective, rather than replacing what collectors do.
During the pandemic, collections as a process became extremely difficult, with companies facing issues meeting payments, a heavy increase in correspondence, and a steady rise in delayed payments.
The unexpected change in working environments has caused challenges with accounting and telephone integration. Payments can be raised from home, but many customers have struggled to send remittances, resulting in major payment delays.
To solve some of these issues, HighRadius recommends an integrated collections and receivables management platform that offers a self-service portal for clients to easily pay, review and dispute invoices.
These platforms also provide automated correspondence based on a customer’s risk profile along with automated call logging and recording.
With the power of AI, it is much easier to reward good customers. Machine learning can analyse data to see if there is a deterioration or improvement of payment terms and reward these customers accordingly. At the same time, this technology allows finance teams to predict late payments and set penalties.
Participants have found ways to reward customers who meet and exceed payment terms with rebate processes based on volume (as seen in the drinks industry), offering cash discounts, or inviting customers to try new products or services before they come to market.
Innovations in loyalty schemes could see B2B organisations offering points and discounts for customers who can meet certain payment criteria. The outcome of these schemes may improve forecasting and provide better data to predict changing customer behaviour.
It is clear technology is an enabler to increasing cash flow but how can you demonstrate value and accelerate your finance transformation project internally?
There is a lot of clever technology out there, but many organisations struggle to manage KPIs well enough to demonstrate value further up the chain.
The group highlighted the challenges of countries operating at different paces in terms of the uptake of automation and the difficulty in measuring success across different entities.
In Italy for example, companies are still collecting cheques in person! Other countries have much slower automation adoption rates with many implementing different payment channels at varying speeds.
The first step to demonstrating value is ensuring you have a truly integrated order and cash management solution which provides full visibility of the entire O2C process. Talk to your vendor to ensure KPIs are revisited and reported on regularly, adding new processes once performance goals have been met.
If processes are still manual, lengthy, and error-prone, you may not be recognising the true value of end-to-end automation, even though this was promised to you by the vendor.
Automation is the key to success and tools that consistently deliver high automation rates can improve a credit and collections team’s productivity by over 40%.
There will always be a place for both human and machine intelligence in successful AI deployments. What comes naturally to people, such as empathy and judgment, is difficult for machines, while analysing mountains of data at scale is practically impossible manually.
When humans and digital workforces work together, organisations achieve greater efficiencies, increased cash flow, and more satisfied and productive employees.
Automate invoicing, collections, deduction, and credit risk management with our AI-powered AR suite and experience enhanced cash flow and lower DSO & bad debtTalk to our experts
HighRadius Electronic Invoice Presentment and Payment (EIPP) Software provides tools that automate and speed up invoice communication and facilitate a faster collection of payments, enabling a closer and more convenient relationship with customers. It automates the invoice transmission and payment collection process providing a configurable solution that supports multiple invoice formats and different modes of transmission (fax, email, portal, etc.) depending on the targeted customer, its integration with ERP systems and a rich search capability enables efficient storage and retrieval of past invoices, backup attachments to minimize disputes and short pays. Apart from that it also has some key features that you would not want to miss out: level-III interchange and surcharge; self-service customer portal; invoicing across email, customer portals, post, and fax; advanced deduction management; and lightning e-payments. The result is faster invoicing and payment collection, better customer service, and improved profitability and cash flow.