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Three Ways to Master the Art of Credit Risk Mitigation: Insights from Five Leading Credit Groups

What you’ll learn


  • Portfolio risk management is an important success factor in an organization’s ability to deliver more business value and mitigate risk.
  • Monitoring of performance metrics gives you insights into your operational efficiency and helps you identify areas of improvement.
  • Leveraging technology that contains Artificial Intelligence (AI), Machine Learning (ML), and deep neural networking capability for more accurate credit scoring is vital for mitigating credit risk.

Insights from five leading credit groups

Introduction

With changing economic conditions, the threshold for risk tolerance is also changing. Adopting and modifying existing risk mitigation strategies is important for maintaining steady cash flow and creating a significant working capital impact in the CFO’s office.

This blog contains key insights on credit risk mitigation strategies from leading credit groups, such as Experian, CreditSafe, CreditRiskMonitor, Credit.net, and S&P Global. These suggestions regarding modifying your native credit policies will help you stay abreast of the changing risk classes and stay ahead of lending out bad debt.

Industry experts from five leading credit groups

Three Critical Risk Mitigation Trends, Shared by Renowned Credit Leaders

Adopting Portfolio Risk Monitoring of Your Customers –

Portfolio risk management is an important success factor in an organization’s ability to deliver more business value and mitigate risk. The portfolio risk monitoring strategy involves identifying, assessing, measuring, and managing risk within the customer’s portfolio.

Emphasizing portfolio analysis to closely monitor risk classes - Experian

Monitoring Performance Metrics Regularly-

Continuous monitoring of the aforementioned metrics gives you a bird’s eye view of your performance and operational efficiency and gives you actionable data for you to focus on and make improvements.

Monitoring receivables performance metrics proactively for course correction- Credit.Net

Adopting Digitalization to Streamline Credit Operations-

12% of organizations’ total revenue is being dedicated to digital initiatives – Gartner. 

Technology plays a vital role in building an agile credit function. A/R executives should look forward to implementing digital transformation initiatives to help their team create strategic value in the office of the CFO.

Leveraging technology leads to accurate credit scoring - Credit Risk Monitor

Conclusion

Credit functions should have the ability to shift gears quickly- Dan Meder, Experian

According to a recent Gartner Risk Leadership Council survey, 66 % of organizations surveyed globally are pursuing some form of digital transformation. Several leading credit teams undertake this initiative to deploy risk management tactics and identify new and emerging risks, especially in the credit space.

Choosing the right credit management system is important to mitigate credit risk. In the US, about 97% of B2B transactions are made on credit. Mentioned below are six key parameters to consider when choosing a credit application to help A/R teams reduce the bad debt by 20%.

 Six key parameters to consider when choosing a credit application

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HighRadius Integrated Receivables Software Platform is the world's only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway - covering the entire gamut of credit-to-cash.