In the telecommunications sector, products and services are sold on both pre-paid and post-paid (i.e. credit) terms. Credit-terms represent inherent risks to payment. That’s why credit risk management is important: to evaluate each customer’s intention and/or ability to pay for the service.
Bad debt comes in different sizes and formats and It is important to start by differentiating between these types of payment risk as the way of managing them are quite different.
- Recurrent late payment - Dissatisfied customers who can pay but intentionally refuse to do so - Customers who unintentionally cannot afford to pay (genuine bad-debt) - Customers who have never intended to pay (fraud)
Scoring evaluation is performed whenever a prospect wants to become a subscriber or a current subscriber signs up for additional services from the operator.
For new subscribers, the Credit Scoring module uses demographic and public social media data as well as external credit bureau information services (acquisition model).
For existing subscribers, this module also considers behavior based on internal data, such as usage and credit history available.
THE MAGIC BEHIND IT
The Credit Scoring module uses statistical modeling, user-defined rules and algorithms to assess each subscriber’s individual risk level.
Through the graphical interface, it is easy to create statistical scorecards, based on scores determined by a variety of factors with different weighting, to determine multiple credit scores, such as acceptance, dunning probability or upgrade scoring.
Risk assessment is not a one-time, or even an every once-in-a-while thing. To be effective, risk has to be monitored frequently and consistently and that’s why Credit Scoring enables real-time credit risk evaluations and pulls the most updated data from external sources like social media public profiles.
360-DEGREE VIEW OF SUBSCRIBERS AND THEIR RISK LEVEL
Keep timely and accurate information on every subscriber’s creditworthiness at your fingertips and prevent losses and bad debt.
BENEFITS OF USING CREDIT SCORING
Get a comprehensive view of risk
RAID Collections’ Credit Scoring module provides a consolidated view of subscriber’s creditworthiness. The scores are empirically built using data from internal and external sources, such as social media public profiles of subscribers, and applying predictive scoring models.
Manage credit risk with confidence
By using the Credit Scoring module, operators can better determine how much credit they can concede and manage the dunning cycle according to each individual credit risk level, and by doing so, increase collections’ predictability.
Improve overall performance
Credit scoring is run continuously throughout subscribers’ lifetime, which helps operators manage their strategies and offers accordingly, thus maximizing customer lifetime value.