Technological improvements have made credit risk management easier for businesses that extend credit to other businesses, but innovation is happening so fast that some companies may not realize how outdated their technological solutions may be.
Nowadays, credit risk management goes far beyond an Excel spreadsheet in the CFO’s office. Companies are increasingly utilizing cross-platform solutions that connect their customer relationship management (CRM), credit and collections infrastructure to enable a comprehensive view of their customers’ needs, past transactions and future selling opportunities. New software systems can allow executives access to their current and potential customers’ up-to-date information in real time and across departments and devices.
With the help of these technological advances, decision makers can visualize data points to allow for higher conviction when deciding when to offer credit and on what terms. This is crucial for managing risk exposure and can help a firm sell even more products to a larger customer base, because you can access clear information about your customer more easily and quickly.
Lower costs, more functions and easier access
The primary value of an updated platform for credit risk management comes from its ability to allow a company to make credit decisions faster and with greater confidence. Additionally, new technological tools can lower costs while expanding functionality. For instance, cloud-based solutions often involve much lower IT support costs; more flexible deployment options; seamless integration across computers, tablets and mobile phones; and the ability to cut down on data infrastructure expenses and in-house hardware that requires constant updating, management and repair.
These days, technological solutions go far beyond bringing computing power to the data. New tools offer robust functionality for credit decision making, collections and CRM. In this way, companies can improve their customer service, sales and support efforts while simultaneously managing risk and lowering expenses.
To learn about other potential barriers to effective B2B credit risk management, view our Rethinking B2B Risk, Part 4 article.