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      Blog

      Identifying customer vulnerabilities using bank transaction data

      28 July, 2022

      We’re always looking to use our data for good. In a recent investigation into better ways to identify and protect the vulnerable, we found that Australian use of short-term credit products such as Small Amount Credit Contract (SACC), Medium Amount Credit Contract (MACC) and pay advance services had increased by over 50% in the first 6 months of 2022.

      To protect potentially vulnerable consumers, organisations need to be able to spot them in their portfolios and get a full picture of their circumstances, accurately and in real-time so that they can support and transact with them in the best possible ways.

      42% of people with poor mental health found dealing with customer services on the phone confusing or difficult. 25% of people with hearing or visual impairment struggled to follow instructions making it harder for them to interact with services providers, and 33% of people with a physical disability faced difficulties getting to a bank branch.

      Without this knowledge providers risk alienating customers, customers suffer a poor experience that could leave them feeling unnecessarily anxious. 57% of people with low capability about money and finances felt nervous, overwhelmed, or stressed speaking to financial services providers.

       

      More than 2 million Australians have low financial resilience and live with high financial vulnerability every day.

       

      Look Who’s Charging (an Experian company) can give organisations the lens they need to spot their vulnerable customers.

       

      What is Look Who’s Charging?

      Look Who’s Charging provides a market leading transaction enrichment solution enabling organisations and consumers to truly understand their banking data. The proprietary solution is fully integrated with over 20 banks including 3 of the 4 biggest institutions and enriches over 1 billion transactions a week to deliver unparalleled insights.

      It is the key to building a rich picture of a consumer’s financial circumstances. With over 300 different categories, covering both income and expenditure, granular detail is built in. The result is a detailed real-time picture of where money is coming from, where it is going, and any significant changes.

      These markers of affordability and potential vulnerability can then be used to identify warning signs in a single account, or spot issues across millions in a lending book.

       

      What insights can Look Who’s Charging provide for me?

      Look Who’s Charging provides detailed insight in real time to help lenders more accurately spot signs of financial vulnerability in their portfolios and improve affordability and credit risk assessments.

      This is based on a more precise understanding of:

      A customer’s income, its sources and stability
      Level of spending on basic household essentials, mortgages or rent
      Patterns of spending highly associated with credit risk or conduct-risk behaviours such as dishonours and gambling transactions
      Buy Now Pay Later (BNPL) activity
      Any reliance on short-term high-cost credit
      Engagement with debt collection agencies

      And much more…

      These metrics give consumer vulnerability and hardship teams early warning of potential vulnerability, and the chance to offer tailored help. Look Who’s Charging’s data can be used in real time to raise flags if consumers start to show signs of vulnerability.

       

      Helping the potentially vulnerable

      Early insight can then be turned into appropriate help. This might mean:

      • Tailored help – such as how to manage high-cost debts more affordably
      • Setting appropriate credit limits or offering more appropriate products
      • Encouraging consumers to save more with nudges or incentives
      • Validating income shocks without inconvenience to the customer, and offering appropriate support
      • Making tailored decisions on credit leeway and holidays

       

      If we can assist your business in better identifying vulnerable customers, please get in touch with us using the form below.

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