“For two-thirds of German executives, their future competitive advantage depends largely on the best possible use of AI”
Düsseldorf, 17 September 2024 – The latest research report, ‘Experian | Forrester Research 2024 – Strategies for Growth’, examines the perspectives of decision-makers in four key areas: strategic priorities, data and analytics, technology and risk. Conducted by Forrester Consulting, the study surveyed 1,320 C-level and director-level executives in the financial services and telecommunications industries in ten countries in the EMEA and APAC regions. 147 participants were from Germany. The report clearly shows how executives are particularly using generative AI (GenAI) to consolidate data sets and thus improve their decision-making models. At the same time, customer experience is coming to the fore in order to be optimally prepared for a future characterised by difficult economic conditions, technological disruption and changing customer expectations.
The race to optimise the use of GenAI is in full swing.
The executives surveyed on behalf of Experian identified technological changes as one of the most important external factors that will influence their business in the next two years, and emphasised the race for AI supremacy to improve business efficiency and reduce costs. Accordingly, 68 per cent of all respondents believe that a competitive advantage in the future will be achieved by those companies that make best use of AI. In Germany, the majority (84 per cent) of the technology managers surveyed by Forrester for Experian are already exploring GenAI use cases with the aim of implementing them within the next year, putting them well ahead of the EMEA/APAC average (73 per cent).
62 per cent of German executives believe that GenAI will significantly improve risk assessment. The analysis of alternative data sources using generative AI is considered the most important use case by respondents in the EMEA/APAC region (62 per cent). German executives also rank it among the top use cases – but only after the use case of generating synthetic data to improve the accuracy of forecasting models, which is just ahead at 65 per cent. German companies are focusing their efforts on GenAI’s ability to extract valuable insights from non-traditional data sets, as well as its ability to create better decision models in the future and to obtain a more comprehensive picture of customers.
Technological disruption as a catalyst for better customer experiences
Access to a centralised, cloud-based platform for data, analytics, and software was identified by respondents as a key factor in improving their risk strategies. Almost half (48 per cent) of German respondents expect to experience higher credit defaults due to missed repayments over the next 12 months. At the same time, 54 per cent of the Germans surveyed by Forrester said that their companies had tightened their lending criteria over the past year. Many German risk managers (41 per cent) also stated that their top risk priority was to improve their ability to identify financially vulnerable customers. Today’s ability to gain a more holistic view of borrowers has improved significantly through better linking of data sources, model development tools, deployment and decision software. This also leads to an acceleration of the data-to-insight-to-action process by using AI. Ultimately, this leads to better customer relationships and fairer lending practices.
Consolidating data sets into a single cloud-based platform is key to improving analytical capabilities.
Data and analytics decision-makers prioritise the relocation of data silos to a single platform that combines data sets and analytical methods, as this better supports AI/ML capabilities and enables them to put models into operation in weeks rather than months. Currently, more than half (55 per cent) of respondents in the EMEA/APAC region believe that the development and deployment of AI/ML models takes too long. In Germany, this applies to 41 per cent. 54 per cent of Germans surveyed also said that they are currently updating their models more frequently than ever to adapt to changes in consumer credit behaviour.
Alternative data and advanced analytics are crucial to helping companies make more accurate credit decisions, especially as consumer behaviour changes and external economic factors continue to influence them. However, the lack of alternative data sources in this context was cited by all respondents as a significant challenge that limits the success of both analytics programmes and model development. In a cloud platform, the advanced capabilities of AI can be used to efficiently process and analyse alternative or complex unstructured data sets and to gain valuable insights that were previously inaccessible. It is precisely in this context that the implementation of these new technologies should improve the accuracy of predictive models and ultimately enable the creation of more comprehensive analytics and credit risk profiles.
‘This year’s study particularly highlights the importance of two critical competitive factors: firstly, to be at the forefront of the race for AI superiority in order to gain a competitive advantage in one’s own sector. In this AI race, Germany stands out in particular: with 84 per cent of the German companies surveyed, an overwhelming majority is already exploring their options for using AI tools with the aim of implementing them in the next twelve months,’ emphasises Jochen Werne, CEO of Experian DACH. ’Secondly, we see a strong investment focus in the area of analytics tools and data infrastructures. Many companies are still struggling with the high time and effort involved in developing and deploying suitable models. Here, the survey results suggest that companies are increasingly using cloud-based services to better integrate data, analytics and software solutions.‘
’It is encouraging to see that the majority of the executives Forrester surveyed for us are optimistic about the next year and are planning major investments in technology. At the same time, we still face major macroeconomic challenges, with the financial burden on customers being highlighted as a significant concern. AI and ML tools offer an important opportunity to improve the accuracy of credit scoring for new and existing customers, thus protecting vulnerable customers by proactively addressing their needs,’ says Malin Holmberg, CEO EMEA & APAC at Experian.
To find out more, download the full report here.
About the study
The ‘Experian | Forrester Research 2024 – Strategies for Growth’ is based on a survey of 1,320 executives in the financial services and telecommunications industries in ten countries, including Australia, Denmark, Germany, India, Italy, New Zealand, Norway, South Africa, Spain and the Netherlands. The research was conducted by Forrester Consulting in August 2020 to understand the collective and individual priorities and challenges at the most senior levels of decision-makers.
About Experian
Experian is a global information and technology company that opens up new opportunities for people and businesses worldwide. With our unique combination of data, analytics and software, we have established ourselves as one of the leading service providers for risk, fraud and identity management in the DACH region.
Experian enables individuals to access financial services such as loans, insurance, mobile phone contracts and online shopping. We help companies of all sizes and in all industries to make smarter decisions, issue credit more responsibly and protect themselves and their customers from identity fraud and crime.
We invest in our talented employees and in new, advanced technologies to harness the power of data and drive innovation. We employ 22,500 people in 32 countries and are a FTSE 100 company listed on the London Stock Exchange (EXPN). Our head office is in Dublin, Ireland.
Further information can be found at www.experian.de, www.experian.at, www.experian.ch.
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