American innovations could improve UK customer behaviours

11 June 2019 | Newsdesk
American innovations could improve UK customer behaviours - Qualco Live

Innovations from the credit industry in America could be used in the UK to improve customer repayment behaviours, industry experts have suggested.

Speaking in a panel session at Qualco Live at The Stoop 2019, Melanie Cumming, head of transformation and strategy (C&R) at Santander and Adam Gillott, head of debt and utilities at TransUnion, said there were many positive initiatives from the US which could be brought to the UK market.

Drawing on her career experience at US brands like Citi and American Express, Ms Cumming said American companies have historically been at the cutting edge when it comes to anticipating customer behaviours.

She explained: “For many years I worked for American companies and they were at the forefront of this. They were looking at accounts that weren’t in arrears and anticipating whether or not to extend people’s credit limits or block accounts before they got to collections.

“If you look at true behaviour scoring models there is a vast difference to what we’re using in this country, to what is used in the US. They look at things like the probability of default, with multiple layers. I truly believe they are light years ahead.”

Ms Cummings’ recognition of success stories in North America were echoed by fellow panellist Adam Gillott of TransUnion, who said that his employer is keen to bring over some of its innovations to the UK in the months ahead. US-based TransUnion bought UK credit reference agency Callcredit in June last year.

“In the US, they educate the customer. One of the big debt purchasers, for example, has an integrated score simulator on their website, which shows the customer the positive effect that paying off their debt is having on their credit score.”

Gillott hopes that this empowerment of customers becomes more common place in the UK, thanks to marketplace innovation from the successful implementation of innovations from overseas.

“In the UK, the general approach to credit scoring was considered to be a bit of a Blackbox, but we are bringing over a trended data approach [from the US] which will show where the customer has been and whether their score trajectory is moving upwards or downwards.”

Mark Watson, product director of RBS-owned brand Esme Loans, said that the industry has been embracing significant innovations in recent years, adding that this may have gone unnoticed because the industry was not always good at signposting new developments.