Research shows credit departments expect repayment difficulties to worsen with good payers picking up the tab
Talgentra, the Customer Revenue Management solutions company behind credit management software Tallyman, is calling for better quality and more focused controls on lending. According to research released today, credit managers expect the number of customers with repayment difficulties to increase over the next year, yet companies continue to make borrowing ever easier still in their quest to increase customer numbers.
Talgentra commissioned research, conducted by Survey Force, among 153 professionals working in both B2B and B2C credit management. These findings are contrasted against the results of a similar survey commissioned by Talgentra in 2001. The key findings of the research show:
· 76% of respondents expect the number of customers with repayment difficulties to increase in the next year. This is a stark increase from the 58% expected in 2001
· 23% of all respondents believe that more than 10% of customers on their credit portfolio will experience repayment difficulties during the lifetime of the credit arrangement
· 34% of companies offering credit to consumers believed more than 10% of their customers would experience difficulties repaying monies owed
· consumer focused businesses expect their consumer credit to grow by an average of 33% in the coming year. This constitutes a 10% increase on 2001’s figure of 30%
31% cited the levels of consumer debt as the single main cause for an increase in defaulting customers, however, this was followed by 27% who expected an increase in the number of customer accounts. Other issues cited as a cause for repayment issues include: the lack of skilled human resources available to focus properly on collections with 11% citing this, and poor technology resulting in collections not being processed efficiently with 10%.
In response to these findings Talgentra is calling for tighter controls in managing credit married with improved profiling of the individuals credit is extended to.
Dave Harris, Managing Director of Talgentra, commented: “The results of this year on year research shows us that the consumer debt crisis is still yet to bite and could get a lot worse before it gets better. This is exasperating and unnecessary as lenders are continuing to market to known non-payers by employing unsophisticated credit management procedures.”
Dave continued: “We are not suggesting companies limit their credit. We are simply advising companies to put procedures in place so that lending does not become a problem. Technology, such as Tallyman, can be used in many ways to cut the levels of default and improve the return, to include: monitoring payments; automating processes, and improving profiling. Not having such procedures and customer visibility is not hurting the companies directly nor the individuals defaulting, but more so the good payers who are having to cover the shortfall”.
Notes to editors:
Talgentra is a global IT company, which specialises in solutions for managing customer revenue. Its business is based around a range of professional services and consulting skills associated with its two software suites, Tallyman, a credit management and collections system and Gentrack, a customer information and billing system.
Tallyman, Talgentra's Customer Revenue Management suite, operates within financial services, utilities, telecommunications and government agencies around the world. Tallyman helps customers maximise their revenue streams, minimise their costs, and achieve excellent customer service and retention. Tallyman customers typically report payback in less than twelve months due to dramatically improved customer collections.
Talgentra currently employs 180 people in its offices in Bristol (UK), Auckland (NZ), Baltimore (USA), Belfast (UK), Hong Kong, Kuala Lumpur, Melbourne and Singapore. The company is part of Sanderson, a leading IT group, which employs around 1000 people globally.
Lucy King/Kam Perera
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