Dynamic Credit Risk in the Telecommunications Industry

Increasing consumer debt levels across Europe have had a considerable effect on the telecommunications industry, especially in the post-pay sector. This, combined with product proliferation, greater product complexity, market consolidation and declining subscriber growth in many key economies, has created several significant challenges for the industry. Telecom service providers have typically deployed aggressive sales and marketing campaigns to drive customer acquisition and churn reduction. The purpose of this paper is to highlight the significant value the Credit and Risk department can deliver—ensuring the right customers are qualified and targeted and the appropriate solutions and strategies are enabled throughout the customer lifecycle. Traditionally, credit risk has been seen as a low priority component of the telecom provider's marketing, sales and lifecycle management strategies. Credit risk suffers from the " Cinderella Syndrome " —operating in the background, often unappreciated—while in reality it has the potential to be a star in the organisation. This paper will highlight the challenges and opportunities that face the credit and risk department, and will propose the first steps that can bring significant improvements to your organization. In addition, Fair Isaac offers to introduce your organization to the Credit Decision Performance Audit that will establish a road map to move to a truly dynamic credit management approach.