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KPN: Dynamic telco operator reduces manual processes by 90%

KPN serves more than 35 million customers across the Netherlands, Germany and Belgium. In the Netherlands KPN provides high-quality telephone, internet and television services and products and is an all-round provider of ICT services.

The challenge
As a dynamic operator, KPN is always looking to increase market share, by increasing accepted applications and ensuring every new customer has the best offer to maximise return. Of course, this needs to achieve customer satisfaction without increasing portfolio risk or bad debt levels. In the saturated, highly competitive mobile telecom market in the Netherlands, market share is now considered in terms of turnover levels relative to the competition, rather than the physical number of subscriptions.

The risk team at KPN faced the challenge of trying to achieve the growth objectives with a registration decisioning process which was being stretched beyond its capacity and capability by the growth the business had seen. The process used many manual elements and could only implement a single registration strategy that was applied to all applicants. The risk team had little control over the decision-making process with a long lead time and high IT costs to make changes.

KPN needed a registration decisioning system that could reduce operational costs through increasing the automation and speed of the application decision. It also needed to enable the risk team to flexibly control strategies and policies as part of the drive to reduce bad debt, increase dealer and customer satisfaction and support marketing campaigns to increase market share.

The answer
KPN knew Experian as a trusted European-wide supplier with a good reputation and strong customer base in the Netherlands. It recognised that Experian’s leading application processing and decisioning system, Transact SM, offered the functionality and flexibility it required, as well as the technical capability to integrate with the complex operational environment.

The Transact SM system delivered takes data from KPN’s front end system, processing and applying a decision strategy in an automated process. The registration process maximises efficiency by first checking the credit worthiness of an individual. If they pass this check, only then is the suitability of the order considered. This prevents a significant order input if the applicant would not be accepted on the basis of credit risk. This reduces customer, and dealer processes and waiting times.

The system has a number of links into internal and external data sources which are only used as required to give a complete picture of the applicant for assessment. Transact SM also automatically retrieves information to prevent fraud, from internal lists and connecting to the national Preventel Telecom database to prevent bad debt and fraud.

This complete applicant picture allows a high quality automated decision to be made on every applicant, based not only on risk but also return, attrition and profitability.

The results
The registration process is now automated with manual activities reduced by 90%, decreasing operational costs. This has also significantly reduced referrals, increased the decision speed, reducing waiting times for dealers and customers to enhance service and satisfaction with the operator.

The Transact SM system also supports segmentation and differentiated decision processes for each client profile. This means that decisions are tailored to the applicant. This enables KPN to maintain the accept rate and increase return with a decrease in credit risk as it can set terms and conditions which reflect the applicant profile.

The ability to segment applicants also supports marketing campaigns. The system can be accessed in batch mode to pre-screen the marketing lists and remove any individuals who would be declined due to risk or fraud, reducing marketing and processing costs by up to 60%. Those that apply through the campaign can be segmented and the campaign strategy applied.

“The impact of the Transact SM system has been significant” said Armin Hoekstra, Credit Risk Manager at KPN. “We have seen the immediate benefits of removing 90% of the manual processes and reducing the data costs by 15%, but we know that the strategic control and flexibility the system gives us is where we will see the biggest impact for many years to come.”

“Experian has delivered a system that exceeds our expectations and will enable us to grow and improve profitability across the business.”

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