Credit card portfolio management practices often rely on analytics such as predictive credit risk and fraud scores to anticipate issues before they become costly, but for this to work correctly the data must be accurate.
As part of their portfolio management processes, businesses often begin by conducting an inventory of internal customer data to detect inconsistencies or gaps in coverage.
1. Automate Collections
Credit card portfolio management systems automate payment reminders, follow-up communications and dispute resolution to help finance teams stay on top of past due accounts receivable – this reduces DSO while freeing teams to focus on what matters most.
A robust collection system also enables the implementation of credit scores and risk automation into credit card portfolio management practices, offering credit scores tailored to entire portfolios or individual accounts as needed to update data quickly and reliably.
Implementing these scores into credit management processes at account origination can help prevent fraudulent accounts from opening, reduce costs and risks, improve customer experience and drive cost and risk savings. Portfolio scoring can also help drive further automated processes as well as track card program performance over time.
2. Automate Reporting
Maintaining consistent monitoring and reporting is an integral component of improving credit card portfolio performance. By employing data analytics and automation solutions, financial institutions (FIs) can gain visibility into their credit portfolios quickly and identify any issues quickly.
If one of your individual portfolios exceeds industry average for card limit growth and increase frequency, take steps immediately to address it before it escalates, such as applying lower increases or tightening cutoffs.
BusinessIQ from Experian can also help automate portfolio account reviews and scoring. This process appends commercial credit scores to your existing portfolio accounts to allow you to measure performance and risk over time, further streamlining the program – something which should occur quarterly at minimum or more often if necessary.
3. Automate Segmentation
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A bank wants to implement new suitability rules against certain customers that will prevent them from receiving credit cards. They wish to modify their decision strategy such that customers who belong to risk segments BB- and CCC are ineligible for credit card offers; to achieve this end they develop a filter component which checks relationship length in days property and credit score property of customer data model respectively.
4. Automate Reconciliation
Reconciliation is an essential but time-consuming task that accounting teams must complete regularly, taking them from receipt to expense report to credit card statement in order to check that all data matches in terms of amounts, dates and descriptions of entries.
Automating reconciliation using software solutions may be the most cost-effective method for businesses looking to streamline this process, reducing operational expenses while helping finance teams stay on top of spending. Such solutions can automatically import data from various sources before matching it using intelligent transaction matching algorithms.
Businesses using accounting systems to track payments and expenses gain a better picture of incoming and outgoing funds so they can make informed decisions regarding spending and cash flow, and gain insight into portfolio performance to discover potential growth opportunities.
5. Automate Customer Service
Credit card portfolio management environments place great emphasis on keeping tabs on potential customers (leads) and their creditworthiness, with no-code platforms designed specifically to capture leads and follow up automatically with them.
As is true for every aspect of credit card portfolio management, data must be accurate to avoid costly penalties and damage to a company’s reputation.
Companies can reduce the risk of inaccurate data by taking a proactive approach to customer service with predictive credit risk and fraud scores. These alerts monitor account activity that could indicate increased default risk, so credit managers can act swiftly, saving both time and money from manually reviewing accounts.