Credit Clear on track to deliver ‘financial well-being’ to Australians and the world
Credit Clear executive director and co-founder Lewis Romano says Australians are facing an “increasingly complex financial life”.
As part of its strategy to improve the mechanics of debt repayment while executing its international expansion strategy, Credit Clear’s (ASX: CCR) has developed artificial intelligence-based communication technology that provides a “frictionless” way to resolve debt.
According to Credit Clear executive director and co-founder Lewis Romano, Australians are currently facing an “increasingly complex financial life” due to the myriad of financing options available, but also, the wide range of pitfalls that can befall the modern consumer. Namely, avoiding the most common reason why people get into debt in the first place: spending more than you earn.
Although it is common for Australians to spend more than they earn, most debt-laden consumers prefer to settle their debts rather than avoid them. In fact, Australian household debt has been rising for decades as more people get onto the housing ladder and purchase big-ticket items such as car loans and credit cards.
According to research published by the OECD, the ratio of household spending to income has more than doubled between 1995 and 2015, going from 104% to 212%.
This trend has understandably pushed up the number of payable loans, and, more importantly from Credit Clear’s perspective, has opened the door for a technology-based solution that can soothe both borrowers’ and lenders’ concerns.
“I became increasingly aware consumers were experiencing enormous friction and frustration from the way communications about payments and debts were delivered,” Mr Romano said.
“Communications often involved pressure tactics to encourage payment, but lacked convenient options, flexibility or, most importantly, a professional and respectful tone.”
Given Mr Romano’s personal observations of inefficiencies in debt collection as an industry, he helped to establish Credit Clear to “create a better way” for customers experiencing stress over making repayments and for companies wanting to better manage their receivables.
Defining wellbeing
Enabled by modern technology, Credit Clear says it is focused on delivering financial wellbeing, which it defines as a “state of mind”.
In a blog post published on Credit Clear’s website, Mr Romano explained that financial wellbeing is a state of mind whereby consumers’ burdens are sufficiently alleviated so as to not be inundated with letters of demand or becoming fearful of experiencing aggressive collection tactics – an issue that seems to be coming to the boil as a result of COVID and more consumers taking on debt.
In fact, the COVID pandemic has created pent-up demand for Credit Clear’s services and pushed the company to achieve record revenues of $3.4 million in Q3 2021.
According to Mr Romano, financial wellbeing is, in essence, about “not being scared to go to your mailbox and see a letter from a collection agency demanding payment of your utility or phone bill or personal loan or credit card.”
“Financial wellbeing relies on empathy, while traditional debt collection often leaves customers feeling misunderstood, excluded, and afraid of being blacklisted or having their credit record adversely affected,” he said.
Credit Clear’s mission is to change that.
Achieving financial wellbeing
Driven by artificial intelligence (AI), Credit Clear is wooing new customers by using targeted messages to the customers of thousands of businesses via email, SMS and social media.
The expectation is that its powerful technology can empower Australians to target (and achieve) financial wellbeing at their own pace.
Credit Clear’s approach to customisation facilitates a variety of tailored client solutions, including settlement discounts, the ability to ‘make an offer’, flexible payment dates, terms and methods while integrating modern staples such as Apple Pay and PayPal.
To further boost engagement rates, Credit Clear is adding multiple languages to improve contact and automate responses. The ultimate goal is to generate higher levels of engagement compared to current collection methods and to create a means for people to “address debt matters in a non-threatening way”.
The company is also adding “machine learning and insights into consumer behaviour gleaned from a historic database of over 100 million records” obtained from past user interaction.
Mr Romano’s overarching ambition is to provide customers with the tools, flexibility and capability to address debt matters privately, while utilising technology to simplify how people track their outgoings.
“With technology, we knew we could create something that allows people to address debt matters discreetly, from the convenience of their mobile device, within flexible parameters set by our clients.
“We’ve developed a frictionless way of catching up that enables people to resolve debt matters, feel good about themselves and not be fearful of embarrassing interactions with debt collectors or being stigmatised because of their financial situation,” Mr Romano said.