A majority of retail bankers (61% of respondents) think cross-selling products to existing customers will be a priority in 2013, results of the sixth European Credit Risk Survey, by analytics and decision management technology provider FICO and the European Financial Marketing Association (Efma), have revealed.
Analysing how Big Data can facilitate in better understanding customer needs and risk is also a priority for 2013, according to over half (54%) the respondents of the European Credit Risk Survey.
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The new European Credit Risk Survey reveals retail bankers’ risk management priorities for 2013.
The survey queried credit risk professionals, from credit-granting institutions ranging from local banks to global institutions, across 27 European countries in September and October 2012. Approximately 70 representatives and 55 companies responded to the survey.
The highest number of respondents (71%), however, agreed that demonstrating a higher return on capital is a priority for next year.
Frans Labuschagne, general manager for FICO in Europe, the Middle East and Africa, said: "In this risk-averse period, banks are looking for credit growth primarily from existing customers, on whom they have more data. But customers are risk-averse too, so banks need to really dig into customer needs to identify offers that might work.
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By GlobalData"That’s where Big Data comes in – it’s a new resource that, if used wisely, can guide much more customer-centric offers and services."
The other high priorities identified were using mobile channels (49%) and increasing capital to meet Basel requirements (40%).
On the risk front, at least 40% of respondents saw delinquencies rising in the next six months on mortgages, auto loans, credit cards, small business loans and overdrafts.
"This represents an improvement on the prior survey, released in July, when these numbers were above 50%. For example, 44% of respondents forecast an increase in mortgage delinquencies, compared to 55% in the last survey," said Labuschagne.
The biggest change in credit demand and supply occurred in the so-called "credit gap" between the percentages of respondents forecasting a rise in demand for credit vs a rise in supply. The credit gap forecast for small businesses fell sharply in this survey to nine points – the lowest point this year.
The respondents forecasting an increase in volume of credit requested by small businesses fell from 37% to 35%, while those forecasting an increase in credit granted rose from 16% to 26%. However, the credit gap forecast for consumer lending rose to 20 points.
Patrick Desmarès, secretary general of Efma, added, "Governments continue to pressure lenders to expand credit to businesses, and recent programmes like the UK small business lending scheme announced by the Bank of England should help.
"However, FICO and Efma believe lenders can and should do more to make capital available to small and medium-sized businesses, which can fuel economic growth and which continue to struggle to get credit."
