Mr Veran Kathan is a Managing Executive with the pan-African cellular communications company, Vodacom. Part of the global communications company Vodafone, Vodacom provides GSM service to over 30 million customers in South Africa, Tanzania, Lesotho, Mozambique and the Democratic Republic of the Congo. In this article, he presents his experience of working with Experian Decision Analytics to create and implement a credit management roadmap as part of Vodacom’s journey to world-class risk management.

South Africa’s consumer credit market has more than doubled in the last five years, reflecting the economic boom and moderate interest rates. The boom in the communications market reflects this growth with mobile penetration reaching 85%, from less than 1% in 2003, and is the continent’s most advanced network in terms of technology deployed and services provided. As in many markets, the convergence of broadcasting and telecommunications is a key factor with access to content becoming more important.

Vodacom offers a range of innovative voice and 3G non-voice products and tariffs, including reliable, low priced wireless data products, mobile TV and multimedia content and business services. With over 23 million customers and 58% of the South African cellular market, Vodacom provides coverage for more than 95% of South Africans.

The ways in which mobiles are used, valued and owned in countries like South Africa is very different from European countries. In many rural areas where the postal service is poor and there are few fixed line phones, a mobile phone allows people to participate in the economic system and increase accessibility. Vodacom knows it has a critical role to play in bridging the digital divide and believes that it has already significantly contributed to this. A key aim for Vodacom is to deliver services to the less-served markets, including those who do not have bank accounts and would, therefore, not be accepted through the normal decisioning processes.

In this dynamic and challenging market, implementing effective and efficient automated decisioning processes for new and existing customers is key to success and enables Vodacom to successfully target new areas of the market. Vodacom is committed to developing world-class risk management and is working in partnership with Experian Decision Analytics to create and implement a credit management roadmap.

The project comprises three phases, starting with the development of a fast and efficient decision process for new registrations. This will enable Vodacom to make an accurate assessment of new applications and allocate a package based on risk and affordability, setting limits which balance risk and return for the organisation.

Vodacom Service Provider will implement processes and systems for the monthly assessment and management of existing customers to enable retention, churn and customer service strategies and setting appropriate limits to enhance revenue and reduce risk. Finally, fully integrated debt management will automate collections and recoveries activities and complete the automation of every key decision in the customer relationship.

The project is focusing on the key elements of data management, modelling, strategies and operational deployment. Timely and accurate data is critical to decision making and the project is developing standard and bespoke credit bureaux interfaces and increasing its data sharing capabilities.

The current modelling is being enhanced with the development of custom models by Experian Decision Analytics, not just for risk, but incorporating the strategies to manage Fraud, Marketing, Churn and Collections and Recovery. Through the implementation of Strategy Management Decision Analytics solutions from Experian, including Transact SM for application processing, Probe SM for customer management and Tallyman for debt management, Vodacom can develop, test, maintain and enhance its customer decisioning strategies.

The credit management roadmap is a long-term investment for Vodacom and is part of the journey towards a world-class risk management infrastructure. This will support the market leader as it continues to grow in South Africa and expand its services and operations to bring the benefit of mobile communications across the African continent.

Veran Kathan – Managing Executive, Vodacom -From his presentation given at the Experian Decision Analytics Telco Forum 2007

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