It’s rare for companies to have so few customers that they could easily follow changes in their information manually. Repetitive manual processes take time, and therefore automated monitoring is a solution to the companies' need to quickly receive information about, for example, changes related to the customer's ability to pay.
"The number of changes is so huge that it is not worth using expert resources to monitor them. Companies will experience payment delays, classification changes, payment defaults and changes in persons in charge. The address can also change. Automated monitoring tells you immediately if something happens in the customer company that we should react to," describes the Product Owner Anna Sirkiä at Asiakastieto.
” Automating customer monitoring gives you peace of mind and time to focus, for example, on business development. At the basic level, the solution only costs about 4 euros per year per monitored company, and it also keeps contact information up to date in your own CRM system”, Sirkiä states.
Monitoring prevents credit losses
As lending professionals, banks and financial companies have known how to use automated monitoring for a long time. In Anna Sirkiä's opinion, all companies could learn best practices from them, because selling on credit always involves a risk that only resets when the money is in the supplier's account.
The value of transactions between companies can be large, and then the risk increases.
"Our customer company was just about to send a freight container worth 50,000 euros to its long-term customer, when it received a monitoring notification of a payment default registered to it. The shipment was interrupted, and our customer avoided an almost certain credit loss", Anna Sirkiä tells.
A payment default is always a serious sign, but even before that, information about payment delays often warns of a company's payment difficulties. The same company may have still paid your bill on time, but late for others. In this case you should at least check the terms of payment.
Monitoring minimizes reputational risk
Companies understand quite well the risk associated with credit trading and the fact that it is important to investigate the customers' backgrounds. When Russia attacked Ukraine, the vast majority of Finnish companies realized that they need to know their customers and their supply chain much more closely. The law on preventing money laundering also obliges companies in several industries to implement enhanced customer awareness. The enhanced duty to know includes e.g. identification of politically exposed persons (PEP), identification of persons and companies subject to national or international economic sanctions, and identification of beneficial owners of companies or entities.
It is possible to automate the sanctions list checks and customers can be monitored using this criterion. Asiakastieto has built its own sanctions database, which allows companies to monitor their customers and get information immediately if these end up on the sanctions list. The sanctions database covers all the most important sanctions lists, such as UN, EU, OFAC and UK.
In Finland, sanctions monitoring can be expanded if necessary to so-called KYC supervision (Know Your Customer), whereby in addition to sanctions, changes in beneficial owners, persons in charge, shareholders and ESG information are monitored and conveyed.
written by Asiakastieto