Check Creditworthiness in Seconds: SCHUMANN Has the Tech to Do It

Blocklists, customers with weak creditworthiness, important limit decisions — the economic consequences of the pandemic has made it vital to take a closer look at customers.

This is possible, and easier than ever, thanks to software products from the German company SCHUMANN.

During recent years of steady economic growth, few companies placed such a strong emphasis on reducing risk. This will change dramatically in the current crisis, the firm warns.

The best way of dealing with the expected economic developments are the focus of experts around the world. The managing director of SCHUMANN, Martina Städtler-Schumann, is certain: “We need early-warning systems that inform us automatically when customers or suppliers get into economic difficulties.”

Digitalisation in Credit Management

The search for new ways of doing things affects all industries, from insurance, through financial services, to industrial and trading companies. The pandemic can be seen as an accelerator of innovation.

“This means that right now, we need to question our traditional practices and update them, if necessary, with new investments,”, Städtler-Schumann believes. Choosing the right technology is decisive for the success of the operative and strategic digital transformation of processes in credit risk-management.

Software Made in Germany

Highly qualified software development and consulting specialists are working on this technology for SCHUMANN, which started in 1997 with just four members of staff. These days, it has more than 160 employees — and continues to grow.

The company from Göttingen plays an important global role in credit and surety. This is where the company’s history began. “Our first customers were credit insurance companies with whom other companies can insure themselves against default on payments,” says Städtler-Schumann, who holds a doctorate in economics.

The second large customer base is the financial service providers — mostly leasing and factoring companies. Industry and wholesale is the third group, who evaluate the value or the creditworthiness of their own customers using SCHUMANN software.

Minimising Risks

The software delivers an evaluation from which the risk of credit default and recommendations for payment conditions can be determined in seconds. SCHUMANN’s customers decide which information should be considered when making the evaluation. There are many interfaces and sources of information from which the data can be evaluated. By combining internal and external data, the software can check the creditworthiness of business partners and monitor them, automatically and online.

Liquidity Simulation

For creditworthiness estimation, balance sheets are often analysed. “But balance sheets from 2019 are currently almost useless if you want to investigate the current situation of business partners to predict your own economic development”, says Städtler-Schumann. The company has a solution for this: automated simulation of business development on the basis of target figures.

She explains: “If a customer, for example, introduces short-time working for his employees or takes out a large loan, this information can be recorded. Our software then automatically provides a new rating. This enables various scenarios for the development of the company to be simulated.”

The automated evaluation of these scenarios makes balance sheets from 2019 usable once more. It is then possible to predict whether suppliers can reliably deliver, and whether customers can pay their invoices for 2020 and 2021.