June 17th, 2008 by Cortera
This month when we introduced our new BOOST tool we got some interesting reactions.
This post isn’t a commercial for BOOST, but some background is relevant: BOOST is a self-service batch processing tool that enables the credit & collections professional to upload their portfolio of customers or potential customers, add credit scores to each record and even add corporate linkage. The data comes back in minutes, not weeks.
The reactions? Many of our customers instantly “got it” and rushed to test the new BOOST functionality. However, some of our (typically smaller) customers didn’t quite know what to make of it. They had never done batch scoring before and some didn’t even know what it was.
It made me wonder why more credit & collections professionals don’t do batch scoring. Whether it’s through BOOST or services from other data bureaus, portfolio scoring can offer compelling benefits to the credit professional. In a world where regulators and CFO’s are pushing to have every exposure analyzed at least once per year, batch scoring is a way to meet the requirement while saving the time it takes to physically look at every account. Pricing is very attractive on a per-record basis, often significantly lower than purchasing a full credit report. The big consumer creditors like banks and mortgage companies have recognized this value and done portfolio scoring for years.
So why don’t more commercial credit professionals take advantage of it? My sense is that the reasons are more to do with conditioning and habits than anything else. From watching the industry and listening to some of our customers, here’s my list in order of what I’ve heard most often:
1) Tradition – “I don’t trust credit scores. A credit professional should conduct a more thorough review of trade experience, public records, references etc. in order to truly analyze a company.”
2) Hassle – “It’s a hassle. First I have to fight with IT to get the resources to pull the file. Then I have to deal with my sales rep who will then submit the file to corporate for processing. After a week or two I get a file back. It’s just not worth the effort.”
3) Overwhelmed – “I don’t know what to do with the data when I get it back. If I get scores back on 5,000 accounts, where do I start and how do I make sense of it?”
4) Budget – “Where do I get the budget for it? It’s a large one-time fee that could potentially consume my entire budget for the year.”
5) Freshness – “Batch scoring is a good way to get a view of the portfolio at a point in time, but what about the other 11 months of the year? I’d rather pull a credit report as and when I need it so I get the most recent data.”
Next time I’m going to address some of these barriers to adoption. In the mean time, tell us what you think.