Offering digital and flexible payment options is the key to increasing sales, retaining customers and supporting suppliers. But how can you do this without incurring the risk of default? The best way is to rely on safe and accurate financial tools that help you better understand your B2B clients, just like Opyn Pay Later does. Let's find out how.
What is Credit Risk?
When a bank grants a loan to a company or when a seller offers a payment extension to a buyer, they become creditors to their clients. As such, it's in their best interest to understand if these clients will be able to meet their debt. The risk that they won't is called credit or default risk, and it is influenced by many variables, some external, related to the economic situation, and others internal and specific, related to the debtor.
Trade credit is a very common practice, especially among companies that have other businesses as clients. Therefore, every B2B company, regardless of its size or sector, should be aware of the importance of proper credit risk management. Accumulating credits that will be paid late or are even uncollectible can lead to cash imbalances and affect the company's ability to meet its own debts to third parties.
Today, this aspect is particularly relevant given the uncertain macroeconomic situation and the increase in inflation, which negatively impact the financial stability of companies.
Good credit risk management allows sellers greater collection security and, consequently, better growth and development capacity.
The Benefits of Credit Assessment to Reduce Credit Risk
Offering digital and flexible payment options can be the key to increasing sales, retaining customers and supporting suppliers. However, the main fear for sellers remains that business buyers will not meet deadlines or even not pay the installments. This is especially true in B2B, where average receipts are much higher.
Performing a creditworthiness assessment of the client is therefore essential to prevent unpleasant mishaps. However, conducting this type of analysis independently is complicated and time-consuming. In fact, many variables come into play in calculating risk and it is not easy for a company to have a complete and correct view of another company's financial status.
To get reliable feedback quickly, it's best to rely on an end-to-end service like Opyn Pay Later, which allows sellers to offer installment payments flexibly and securely to their clients, taking care of everything from credit analysis to debt recovery and potential defaults.
Opyn Pay Later allows merchants to maximize and simplify sales, improve cash flow due to more timely payments, reduce administrative costs and default risks. At the same time, it offers buyers the opportunity to pay in installments through an innovative, automatic, and 100% digital payment service.
How Opyn's Advanced AI and Machine Learning Technology Powers Credit Assessment
To minimize the risk of default and make quick and safe decisions, it's crucial to leverage cutting-edge technology combined with financial expertise. This is where Opyn's proprietary AI and machine learning systems deliver exceptional value.
The Technology Behind Opyn's Credit Assessment
At Opyn, we've spent over a decade perfecting our proprietary technology that combines artificial intelligence and machine learning algorithms specifically designed for financial risk assessment. Our system functions as a sophisticated digital underwriter that processes and analyzes data at a scale and speed impossible for human analysts alone.
Real-Time Data Processing and Analysis
When a merchant enters a buyer's VAT number into Opyn Pay Later, our platform immediately:
- Aggregates comprehensive data sets - The system captures hundreds of data points from both internal databases (built from our experience analyzing over 15 billion credits) and external sources (including financial registries, payment histories, and market indicators).
- Applies predictive modeling - Our machine learning algorithms identify patterns and correlations invisible to traditional analysis. For example, the system can detect subtle relationships between payment behaviors across different sectors that might indicate elevated risk despite otherwise positive financial indicators.
- Conducts multi-layer verification - Beyond basic financial metrics, our AI performs sophisticated anti-fraud checks by cross-referencing and validating:
- Company registration details
- Digital footprints (phone numbers, email domains, IP addresses)
- Web reputation and online presence
- Historical transaction patterns
- Industry-specific risk factors
Practical Example: How AI Improves Risk Assessment
Consider a scenario where a merchant receives an order from a relatively new company with limited credit history. Traditional credit checks might flag this as high-risk or inconclusive, potentially causing the merchant to decline a valuable business opportunity.
Opyn's AI-driven system takes a different approach:
- It analyzes the company's digital footprint and transaction velocity, identifying that while new, the business demonstrates consistent growth patterns typical of successful companies in its sector.
- It examines the founders' previous business ventures and their payment histories.
- It evaluates the company's customer base and the stability of its revenue streams.
- It assesses macroeconomic factors specific to the company's industry and geographical region.
In seconds, our algorithms synthesize these diverse data points to provide a nuanced risk assessment that might reveal this buyer as a good credit risk despite its limited history.
Continuous Learning and Improvement
What truly sets our technology apart is its ability to learn and improve over time:
- Self-adjusting algorithms - Each transaction and repayment provides new data that refines our models, making them increasingly accurate.
- Adaptive risk thresholds - Our system automatically adjusts risk parameters based on changing market conditions, helping businesses maintain appropriate credit policies even during economic fluctuations.
- Sector-specific intelligence - The platform develops specialized expertise in different industries, recognizing that risk factors in manufacturing differ from those in retail or professional services.
This continuous evolution ensures that Opyn's credit assessments remain at the cutting edge of financial technology, providing merchants with decision-making tools that grow more precise with each transaction.
All of this happens in mere seconds, after which the merchant receives comprehensive feedback on the buyer's creditworthiness, enabling confident business decisions without delay.
By entrusting us with the credit risk analysis of your clients, you will have access to state-of-the-art assessments and significantly reduce exposure to fraud and losses. This technological advantage allows you to make valid decisions quickly and focus more time on growing your business.
This is also confirmed by our client Gianmaria Romano, CEO at I-Tech, a company specializing in high-quality refurbished tech products, who states:
"With Opyn Pay Later, I feel more at ease when proposing flexible payments, especially to new clients. Opyn Pay Later performs a quick credit check on buyers and, if the outcome is positive, it allows me to send the payment link in an instant. In this way, I am more peace of mind and clients pay comfortably."
A good credit risk management policy requires flexible and accurate financial tools that help you better understand the creditworthiness of clients, thus minimizing defaults. Being aware of a client's solvency level is a fundamental element in building strong business relationships.
Reduce your credit risk and grow your business by offering better payment terms and flexible installments to your clients online and offline. Discover Opyn Pay Later!
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