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CREDIT CLEAR LIMITED (CCR): Revolutionising Debt Collection: CEO Andrew Smith on Credit Clear's AI-Driven Digital Transformation, Major Client Success, and Future Growth Strategies

August 28, 2024 • Andrew Musgrave

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Discover how Credit Clear Limited is revolutionizing the debt collection industry with cutting-edge AI technology in this episode of ASX Briefs. Join us as we chat with Andrew Smith, Credit Clear's CEO, who provides an insider's perspective on the transformative shift from traditional debt collection to innovative digital communications. See how this shift is not only boosting engagement rates but also elevating customer satisfaction across sectors like banking, telecommunications, and insurance. Andrew dives into the strategies that have helped onboard major clients like ANZ and Suncorp, emphasizing the pivotal role of performance and customer experience in driving impressive growth.

In our comprehensive update, Andrew sheds light on Credit Clear's current standing and future outlook. From recent progress and strategic initiatives to key developments that are paving the way for continued innovation, discover what stakeholders can expect in the coming months. Learn about the significant metrics that showcase the effectiveness of Credit Clear's digital approach, with an impressive majority of payments now processed through digital workflows. Don't miss this engaging conversation that highlights the ongoing success and future potential of a leading technology company in the debt resolution space.

Andrew Musgrave:

Welcome again to ASX Briefs, and today I'm joined by Andrew Smith, the CEO of Credit Clear Limited, an Australian technology company that has developed a digital billing and communication platform to help organisations manage customer repayments. Andrew, thanks for joining me today and welcome to the podcast.

Andrew Smith:

It's a pleasure to be on.

Andrew Musgrave:

Okay now the company has been making significant strides in the debt resolution space, so can you share some of the exciting developments in your core offerings?

Andrew Smith:

Oh look, one of the most exciting developments in the core offerings is the development of some technology supported by people. We've got an AI-driven technology that now resolves debts in a digital way for those that are wanting to avoid phone contact or don't look at static emails or, in fact, letters in some instance. So we're now seeing a digital transformation away from traditional methods of debt collection into more digital methods. So that's probably the most exciting part, and being at the forefront of that in terms of utilising and artificial intelligence to anticipate how, when and in terms of what types of messages will get engagement rate and get the best solution to an overdue debt. So that's probably the most exciting part of what's been leading the way in terms of this market.

Andrew Musgrave:

Okay, and your client base includes both Tier 1 and Tier 2 clients, so how has this diversification benefited your growth?

Andrew Smith:

Well, it's always nice to have a diversification across clients, being that you know you're not all, you know in on certain sectors of the market or or certainly clients themselves. So you know, our largest client represents just a little under eight percent in terms of our total revenue. So we're pretty. We're pretty lucky that we've got a very, very widespread across many, many different industries including banking and finance, insurance, telecommunications, utilities and government and being, now that we're really penetrated into that sort of better town tier one clients and I'm talking about big four banks, you know, big telecommunications companies, we are able to scale those businesses by expanding the work that we do for them and also improving the performance and generating more income that way.

Andrew Musgrave:

Okay, and your recent results have shown impressive growth. So what were some of the key highlights that were a standout?

Andrew Smith:

Yeah, look, it's been a real standout for me, winning our first big four bank in ANZ. That's in some respects the first of the four and, as you would appreciate, it's the hardest o ne is the first one, so that's been fantastic. We've also made some wonderful way in terms of the sort of electricity sector, with you know three or four major utility companies within that sector choosing to, to use our services in the last 12 months, many of which haven't necessarily been offered yet, so we're not seeing the the upside of revenue or earnings yet. Um, and the third area which has been a real growth area for us has been in that insurance space, with the likes of, say, Suncorp through their brands like AAMI or IAG, in brands like NRMA. So we've really started to take an ownership of that insurance space and show that the technology really assists clients and third parties in managing overdue debts.

Andrew Musgrave:

Okay and accessing like those companies in those sectors. What were some of the key strategies you employed to get those companies on board?

Andrew Smith:

Well, initially it was working with smaller companies in the sector and building a strong reputation around performance, and what I mean by performance is around delivering better recovery rates and better solution on overdue debts. The second way was around demonstrating that the customer satisfaction of those clients' customers was very high, measured by the net promoter score. So that gives you a very strong case to move forward to new customers that are perhaps slightly larger, where you can really say not only do we deliver a better financial outcome to you as the client, the experience to your customers is vastly improved as well, and the way that I explain that to a lot of people is to say that you know what. Traditionally, you know collections businesses have made calls to people, and usually it's in an awkward time rather than what we try to do is use our database to anticipate how and when people want to receive communication and a lot of the times that's via their mobile phone either via text message or WhatsApp message, potentially, or via an email and anticipate when they're most likely to respond. It's almost a little bit like reverse marketing and, you know, allow them a convenient way to resolve the debt.

Andrew Smith:

So what we're seeing, you know, in the net promoter score feedback in the verbal, you know, the written feedback is that it's so much easier to you know, review an overdue bill at a time that's convenient to them, rather than answer a phone call, you know, when they're at work or with their family or having dinner or preparing dinner.

Andrew Smith:

Let's just say that the overwhelming feedback is this is a much easier solution, much more user-friendly, and it allows them to not necessarily have the anxiety of someone calling them demanding payment on an overdue bill that they may have just overseen. So, you know, we're seeing a lot of very strong feedback in terms of an uptake of that reflected in our numbers. Reflected in our numbers. You know, I think about, uh, you know, only three percent of people we now make a phone call to you know answer or answer their phone. Um, whereas 87 percent of people who would send a text message or an email to actually open that email or text message and 65 percent of them will go through to the link and start to self-service in terms of making a promise to pay a payment in full or set up a payment arrangement. So we're seeing, you know, that transition to digital treatment, you know, now in excess of 70% of all payments that we're getting through the business are being delivered through a digital workflow.

Andrew Musgrave:

Okay, and if we can just delve into the technology in a little bit more detail. So the growth in digital collections has been very impressive. So can you just touch on the AI driven platform that you're using and some of the features that are resonating with your clients?

Andrew Smith:

Yeah, look, anything you can provide to your clients customers to make it easier and more efficient to pay are ones that are well received.

Andrew Smith:

We're also limited in terms of regulation in Australia on the number of times you can contact someone in an unsolicited way.

Andrew Smith:

So let's just say you've got three contacts you can make per week to someone in terms of unsolicited requests to pay a bill. So, therefore, what we're doing is we're just maximising the engagement on each of those contacts so we will know if someone's likely to open an email, or if someone's likely to open a text message or a WhatsApp message. We can anticipate if someone's likely to want to enter a payment arrangement. We can actually anticipate how people are likely to respond to certain worded messages. So what we're actually trying to do is, you know, with a limited number of contacts that we're allowed to make, we want to maximise the engagement and conversion to a positive outcome, whether it be a promise to pay a payment in full, a payment arrangement or, in some instances, resolve a dispute as well. So, once again, streamlining that process, and that's what the technology does w ell, it's almost like a virtual collector in an environment where people who don't want to speak to someone on the phone, which is, as you know, becoming more and more common, doing that in a better way.

Andrew Musgrave:

Okay, and just looking ahead, what are the plans for international expansion, particularly in the UK and Europe?

Andrew Smith:

Yeah, look, we're certainly having a look at opportunities in UK and Europe right at the moment. We see that as the next natural step outside of that sort of Australian New Zealand market where we operate and you know we're certainly conducting some due diligence on companies in that space and, look, I would suspect we'll be doing something this financial year in terms of an acquisition in the UK for sure.

Andrew Musgrave:

Okay, and just to wrap things up, what are some of the key milestones you're looking to achieve in the next 12 to 18 months?

Andrew Smith:

Yeah, look, you know we're looking to hit group revenue of over $50 million in FY25. That's certainly where we want to target ourselves. You know how we provide guidance throughout the year might be a little bit more conservative than that, but that's certainly what we want to do as a business organically grow it by 20% again and continue to grow the operational leverage and profitability through, you know, converting a majority of that extra revenue to the bottom line. So you know they're two real milestones in terms of growth and demonstrating continued operational leverage are certainly the two things that are front and centre. The other thing that's going to be critical is continuing to win clients in that tier one sector and onboard them. So we can, you know, shore up that. You know we're not just looking at 2025 financial year, we're still looking at 26 and 27 to continue that growth. I strongly believe we've still got a long runway to go, not just in terms of Australia, but internationally as well.

Andrew Musgrave:

Okay, Andrew. Well, that's been great to chat today and get an update on where the company's at, and we look forward to further updates from Credit Clear in the upcoming months.

Andrew Smith:

Thank you very much for your time.

Andrew Musgrave:

That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.