According to research from the Australian Retail Credit Association (ARCA), 83 per cent of consumers are unaware of the recent changes to credit reporting.
This lack of consumer awareness was a key theme that underpinned the eighth series of ARCA executive breakfasts in May.
With the Australian Government legislating mandatory comprehensive credit reporting for the major banks, consumer education will be key. The ARCA breakfast brought together a number of industry leaders to discuss the key issues around best practice implementation. Indeed, a panel of early mover credit providers shared key CCR implementation lessons.
ASB Bank chief risk officer Kevin McDonald (pictured), opened the event sharing a number of insights on how his bank tackled CCR in New Zealand. Ultimately CCR has led to many benefits for ASB Bank.
It has saved the bank over $2 million in credit losses and potentially $10 million in fraud losses.
However, for McDonald, the broader theme around CCR is around delivering for the customer.
n his keynote presentation McDonald drew on his 39-year career in financial services, acknowledging that throughout his tenure in banking, the focus was always on the customer.
A “self-confessed data geek”, McDonald said initiatives such as CCR were key to unlocking the value to the customer. Because of his experience at ASB Bank, McDonald had a number of lessons to share.
He remembers many difficult conversations back then around its application. For McDonald, framing the message around CCR is important. The focus should be on the benefits, for example the message should be about achieving better consumer outcomes and unlocking value, rather than it simply being mandatory.
He also urged the industry to engage with boards, executives and teams who were responsible for customer engagement.
“The starting point is to talk to your board and those who own the customers. It’s a no brainer. You need to think about risk management through a customer lens and connect with your colleagues who own the customers. It leads to better customer outcomes.”
Here, it also needs to be customer led, to ensure that customers understand the opportunities that come from CCR. “It also needs to be strategic,” said McDonald.
“Over too many years, I have seen new initiatives introduced but no one takes a step back earlier in the project to assess how it should be implemented. If that was done, there would have been no need for CCR to be made mandatory."
The AB+F June edition will include further coverage of the ARCA breakfast including lessons from the panel of first-movers.