How to Boost Revenue and Minimize Credit Risk using AI-driven Credit Automation

How to Boost Revenue and Minimize Credit Risk
using AI-driven Credit Automation

4 Min Reads

Emagia Staff

B2B credit processing often slows down customer onboarding because of the multiple exchanges with multiple stakeholders. If done manually, credit processing takes more time, impacting revenue and customer acquisition. AI-powered credit automation can help enterprises overcome this problem with an end-to-end digital credit process that automates credit decisions and accelerates customer onboarding.

What is B2B Credit Management System?

B2B credit, also known as trade credit, is a financial agreement between businesses where the supplier provides goods or services to the buyer on credit and receives payments at a later date. In a typical B2B credit agreement, suppliers give buyers 30, 60, or 90 days to pay.

B2B Credit Management System in Uncertain Times

Faster and smarter credit decisions lead to increased revenue and minimized credit risk. However, B2B credit processing often slows down customer onboarding because of the multiple exchanges with multiple stakeholders such as credit bureaus, and credit risk agencies. If done manually, this takes more processing time, slowing down the customer onboarding process. AI-powered credit automation can accelerate credit decisions, increase healthy revenues and profitability.

Today most businesses are dealing with challenges such as an increase in default payments, increased insolvency and inflation. Adding to this are the current economic and socio-political challenges, which have further tightened credit risk management. Tools such as AI-based credit automation can help businesses overcome these challenges and limit the bad debt loss.

What are the Challenges with Conventional Credit Management?

The conventional credit review process is complicated and slow, often requiring multiple exchanges with external systems, excel formulas/macros, and interactions with multiple stakeholders for approvals. This process can result in unnecessary and costly delays.

A good credit management system optimizes your credit process and removes friction with digital credit application forms, digital signatures, digital reference checks, capturing credit bureau information etc.

Cali Bamboo boosts Digital B2B Credit Decisions with Emagia. Download Case Sttudy

To overcome the process delays and enable businesses to make timely and accurate credit decisions, businesses are increasingly moving towards intelligent credit management tools that quickly ingest data from external sources such as credit agencies and information bureaus to help credit managers build a complete picture of the customer before determining the credit terms and processing credit.

Why Should Businesses Consider B2B Credit Risk Automation?

As businesses come under the pressure of making faster and better credit decisions, credit risk management becomes vital for the well-being of any organization. Whether it is reviewing the credit profile of customers, minimizing bad debts, reducing the customer on-boarding time, or automating credit decisions, organizations can minimize credit risk and achieve 360◦ visibility on customers’ credit risk exposure through credit automation. AI-powered automation accelerates various steps involved in the credit automation process.

What are the Latest Trends in B2B Credit Risk Management?

5 Key Components of Credit Risk Management, 1.Steamlined Customer Onboarding Process, 2.Efficient Credit Data Aggregation, 3.Best in Class Credit Scoring Model, 4.Standardized Approval Workflows, 5.Periodic Credit Reviews

The demands on credit management have intensified since March 2020 – from the onset of COVID-19. Credit Risk remains elevated though the economy is rebounding from the pandemic-induced slump. As government funding subsides, there will be a higher-than-normal volume of bankruptcies over the next few years.

The workload to manage this elevated risk will remain higher than pre-pandemic days. For example, annual updates of credit assessments will be changed to every three to six months for many customers. Much of the effort to manage this risk will be done in a Work from Home (WFH) environment where manual, paper-based operations will not suffice.

Adding on to the challenges, we now have inflation and increasing interest rates. Borrowing will be much more expensive. Another major demand on credit management will be speed. A shift of sales and order processing activity to e-commerce demands fast, accurate credit approvals for both new and existing customers. Customers will not wait for a slow ecommerce order process. If businesses do not have faster credit approvals in place, they are at the risk of losing customers.

How AI Plays a Big Role in B2B Credit Automation

AI-powered credit automation plays a big role in simplifying the credit management and minimizing the credit risk exposure for businesses. AI-driven digitization can automate up to 90% of the manual work in credit vetting, setting credit limits, and enforcing credit controls.

AI-driven credit automation solutions deliver actionable insights and empower businesses with smarter data that comes handy to make any critical decisions. Using the latest bureau data, and information from peers with customers-in-common, AI-based credit management tools employ analytics and smart predictions to help businesses make credit decisions faster, easier, and in the best interest of the business.

What are the Benefits of AI-powered Credit Automation?

benefits of credit risk management automation software_emagia

AI-powered credit automation empowers businesses to make more confident, accurate decisions and helps onboard customers faster by offering a number of benefits such as:

  • Eliminating cumbersome manual processes including manual credit scoring
  • Aggregating industry and third party data to create accurate credit profiles
  • Generating smart predictions for great accuracy
  • Monitoring customers’ credit risk in real-time and triggering alerts
  • Automating correspondence and credit approval workflows for improved collaboration
  • Providing a centralized dashboard for a 360-degree view
  • Reducing credit processing time from days to just hours

How Emagia AI-powered Credit Management Helps Onboard Customers Faster

Emagia’s AI-powered Credit Management empowers organizations with an end-to-end digital credit process that automates credit decisions and accelerates customer onboarding. Using this intelligent solution, businesses can go paperless and send digital credit applications from anywhere, receive completed applications on any device, review the credit profile of your customers in real-time, and speed up credit processing with the latest credit bureau reports and credit scoring.

Many global enterprises are already using Emagia AI-based Credit solution to manage their credit risk and grow their businesses rapidly. Connect with us to see Emagia AI-powered credit live and how it can enable you to make accurate credit decisions.

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