AICM 2026 Risk Report

2026 AICM REPORT RISK

AICM RISK REPORT 2026

Publisher: Nick Pilavidis FICM CCE Chief Executive Officer

Australian Institute of Credit Management

Editor: Claire Kasses

General Manager

Australian Institute of Credit Management

Mob: 0499 975 303

Design: Anthea Vandertouw

Ferncliff Productions

T: 0408 290 440

E: ferncliff1@bigpond.com

Australian Institute of Credit Management

Level 3, Suite 302, 1-9 Chandos Street

St Leonards NSW 2065

T: 1300 560 996

E: aicm@aicm.com.au

www.aicm.com.au

Welcome

Nick Pilavidis FICM CCE Chief Executive Officer, AICM

Credit professionals continue to play a pivotal role in navigating financial risk and ensuring the stability of businesses across Australia. In a rapidly evolving economic and regulatory environment, the need for strong risk management has never been greater.

The 2025 Risk Report is a reflection of the challenges and opportunities within our profession. Informed by insights from AICM members, industry experts, and our comprehensive Risk Survey, this report provides a clear picture of the current credit risk landscape and the proactive strategies being implemented to address these issues.

Over the past year, we have seen rising insolvencies, heightened fraud activity, and increasing cybersecurity threats. At the same time, the industry is embracing AI, automation, and ESG considerations as part of broader risk management strategies. These shifts highlight the importance of adaptability and continuous learning for credit professionals.

Despite the challenges, our community has shown resilience, and many credit teams are improving their performance through strategic initiatives and enhanced customer engagement.

Thank you to everyone who contributed to this report and to the AICM members who continue to share their insights and expertise. Your dedication strengthens the profession and ensures we remain at the forefront of risk management.

Looking ahead, we encourage you to leverage this report’s findings to navigate 2025 with confidence and preparedness.

Best regards,

Nick Pilavidis FICM CCE Chief Executive Officer, AICM

Welcome

Patrick Coghlan MICM CEO, CreditorWatch

As we present the 2026 AICM Risk Report, it’s clear the credit landscape continues to evolve at pace.

Elevated insolvencies, persistent cost pressures and rapidly shifting global conditions are reshaping how Australian businesses trade, and how credit professionals safeguard their organisations. In this environment, the profession’s role has never been more critical.

At CreditorWatch, our focus remains on developing and delivering the data, insights and technology that help credit teams stay ahead of emerging risks. Every day, we see the power of informed decision‑making: from early detection of financial risk to the meaningful impact of proactive customer engagement. As AI based enhancements and automation become embedded across the credit lifecycle, we also see enormous opportunity for the industry to elevate its efficiency, impact and resilience.

Equally important is the strength of the credit management community itself. Since 2021, CreditorWatch has proudly sponsored the Young Credit Professional of the Year Award – a commitment that reflects our belief in strong future of the profession. The consistently high level of maturity, capability and drive of YCP entrants continues to inspire confidence.

Thank you to the AICM, its members and contributors for your ongoing dedication. We look forward to supporting you through another year of change, challenge and opportunity.

Patrick Coghlan MICM Chief Executive Officer CreditorWatch

Our 2026 SUPPORTERS

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Overview Navigating the new normal: AICM Risk Outlook 2026

Nick Pilavidis FICM CCE, Chief Executive Officer, AICM

Survey findings, advocacy priorities and the emerging risks shaping Australia’s credit profession

Each year, the AICM Risk Survey gives Australia’s credit profession a mirror to examine itself – what it fears, where it’s exposed, and how it’s adapting. The 2026 edition, proudly supported by CreditorWatch, is our most comprehensive to date: 89 respondents, 94 per cent of them AICM members, and 65 per cent in leadership or management roles. The

findings were presented at the AICM Division Conference series in March 2026 and form the foundation of this year’s advocacy agenda.

The headline message is one of cautious resilience. Credit professionals are eyes open about the challenges ahead – but they are not standing still. The data shows a profession that is modernising rapidly, managing well under difficult conditions, and looking to AICM to hold the line on the regulatory issues that matter most.

Source: AICM Risk Survey 2026, n=89

Credit confidence index shows cautious confidence

This year we introduced a new metric: the Credit Confidence Index (CCI), a composite score drawn from four forward looking survey questions. The overall score of 42 out of 100 captures a profession that is cautious and anticipating deterioration – but not in crisis.

The four components tell a nuanced story (see Figure 1). Three macro facing indicators scored firmly in negative territory: Credit Risk Outlook (34.6), Payment Behaviour Outlook (34.2) and Insolvency Expectations (34.5). In each case, between 65 and 72 per cent of respondents

“Pessimistic about the environment, but confident in their own house. That’s the story of the CCI.”

expect conditions to worsen over the next 12 months. Against that backdrop, the fourth component – Organisational Preparedness – scored 64.6, reflecting genuine confidence in credit teams’ ability to manage through difficult conditions.

The dominant risk: Economic conditions

When asked which factors would have the most significant impact on credit risk in the coming year, respondents were unambiguous. As shown in Figure 2, economic conditions came in at 84 per cent – the clear number one concern by a substantial margin. Customer cash flow followed at 67 per cent, insolvency levels at 59 per cent, and interest rates at 54 per cent.

One notable shift from previous years: supply chain issues, which dominated risk

Source: AICM Risk Survey 2026, Q8, n=81

conversations in 2022 and 2023, have dropped sharply. The profession has adapted. The risks are now overwhelmingly macro economic in nature – and government policy and regulation, cited by 36 per cent of respondents, is emerging as a growing concern, a theme we return to below.

Forward outlook: Deterioration expected across the board

The forward looking data is consistent across multiple indicators (see Figure 3). Sixty two per cent of respondents expect general business and credit conditions to deteriorate in 2026, with only 19 per cent anticipating improvement. On overall credit risk specifically – meaning day to day portfolio exposure – 72 per cent expect some or significant

84%

of respondents cite economic conditions as the #1 credit risk for 2026

deterioration, with only 10 per cent optimistic about improvement.

Insolvency experience and expectations align with this sentiment. Half of respondents reported that their organisations experienced increased insolvency volumes in 2025 compared to prior years shown in figure 4 –not a forecast, but lived experience in their credit books. Looking ahead, 65 per cent expect insolvency levels to continue rising into 2026.

Source: AICM Risk Survey 2026, Q9, Q11, Q26, Q28, n=68–81

“Sixty-two per cent of respondents expect general business and credit conditions to deteriorate in 2026...”

Figure 4: Insolvency expectations over then next 12 months

Respondents n = 81

Source: AICM Risk Survey 2026, Q11 – “What is your expectation of insolvency levels over the next 12 months/: (n=81, 8 skipped)

Source: AICM Risk Survey 2026, Q11 n = 73-81

Corporate insolvencies: A new peak

The ASIC data published on 16 March 2026 confirms what credit professionals are feeling on the ground. As shown in Figure 5, corporate insolvencies in FY25 reached approximately 14,700 – the highest level recorded in modern data, surpassing the FY23 peak and dramatically above the COVID suppressed lows of FY21. The financial year to February 2026 has already re corded over 9,300 new company appointments, tracking well above the prior year’s pace.

The drivers are familiar: post pandemic economic adjustment, sustained cost pressures, and the Australian Taxation Office’s increasingly firm approach to legacy debt recovery. February 2026 alone recorded 1,260 new insolvency appointments – up 41 from the same month the prior year. The pace has not eased.

One notable development in the insolvency data (see figure 5) is the recent softening in Small Business Restructuring appointments. After growing strongly through FY24 and into the first half of FY25 – reaching a monthly peak of 343 in March 2025 – restructuring volumes have pulled back in recent months. February 2026 recorded 147 appointments, 34 per cent below the same month a year earlier. Whether this represents a natural plateauing of the regime’s uptake, ATO tightening their expectations, or changing creditor behaviour remains to be seen. AICM will be monitoring this trend closely, particularly given the ambivalence members expressed about SBR outcomes in the 2026 survey.

Importantly, the survey data suggests that credit teams have largely anticipated these insolvencies. Rather than being caught

Figure 5: Insolvency appointments

Source: ASIC Series 1 statistics – first time a company enters external administration or has a controller appointed, published 16 March 2026. March 2026 provisional figures excluded

“One notable development in the insolvency data (see figure 5) is the recent softening in Small Business Restructuring appointments.”

off guard, the profession has been managing proactively – adjusting credit policies, tightening monitoring, and improving collections processes to minimise financial exposure when customers do fail.

Personal insolvencies

In contrast to the surge in corporate insolvencies, personal insolvency levels remain well below historical norms. As illustrated in Figure 6, monthly personal insolvency appointments – comprising bankruptcies, debt agreements and personal insolvency agreements – collapsed during the COVID 19 economic response period, falling from a pre pandemic monthly average of around 1,885 to a low of approximately 700 at the height of

government stimulus measures in late 2020. The subsequent recovery has been gradual rather than sharp. January 2026 recorded 1,102 personal insolvencies nationally, still 42 per cent below the pre COVID monthly average. Debt agreements have grown as a share of the mix over the past 12 months, which may reflect households managing elevated cost of living pressures through structured repayment arrangements rather than proceeding to full bankruptcy. While the trend is upward and credit professionals should expect continued growth in personal insolvency volumes through 2026, the data does not yet suggest the kind of abrupt correction seen in corporate appointments – rather, a measured and sustained normalisation toward pre pandemic levels.

Figure 6: Personal Insolvency appointments

Source: AFSA – Monthly personal insolvency statistics time series, published 16 March 2026 (data to January 2026). Shaded region indicates COVID-19 economic response period (Apr 2020 – Jun 2021). Totals sourced directly from AFSA “Total personal insolvencies” row.

Source: AFSA – Monthly personal insolvency statistics time series, accessed 16 March 2026.

Fraud: More than half of organisations affected

Fraud exposure has become a baseline operating condition for Australian credit teams. Fifty three per cent of survey respondents experienced at least one type of fraud in 2025 – more than half the membership. As illustrated in Figure 7, the most common types were application fraud (43 per cent), identity theft (21 per cent) and payment redirection scams (19 per cent). These are not isolated incidents – they reflect systematic, increasingly sophisticated attempts to exploit credit onboarding and payment processes.

The financial cost picture is mixed. Twenty five per cent of affected organisations reported no direct monetary loss. But 28 per cent said the cost was unknown or could not be quantified – a significant silent exposure.

Four per cent of respondents reported losses exceeding $250,000.

The character of fraud is also changing. Application fraud is becoming more sophisticated with the use of AI generated documents and synthetic identities, making verification at the point of onboarding increasingly critical. AICM’s advocacy agenda for 2026–27 includes pushing for industry fraud sharing frameworks and raising awareness of identity verification best practice.

“AI-generated documents and synthetic identities are making application fraud increasingly difficult to detect at the point of onboarding.”

Source: AICM Risk Survey 2026, Q15–Q16, n=75–76

Collections performance: Holding the line

Against a difficult macroeconomic backdrop, collections teams have performed well. 60 per cent of respondents reported that their collections performance either improved or stayed the same in 2025. Only 17 per cent reported deterioration – a strong result given the conditions.

When respondents who improved were asked what drove the gains, 51 per cent pointed to improved internal processes and automation, and nearly half cited more proactive collections strategies. The message is clear: the profession is modernising and the investment is paying off. Process improvement and technology adoption are delivering measurable risk outcomes, not just efficiency gains.

Hardship management practices remain uneven across the membership. Fifty six per cent of organisations use proactive communication as their primary hardship identification mechanism, and 46 per cent have trained staff to recognise hardship indicators. But 19 per cent – one in five – have no defined approach at all. AICM will continue to support members by providing guidance on best practice for hardship identification, escalation and treatment frameworks to address this gap.

Small business restructuring: Now mainstream, still maturing

The Small Business Restructuring (SBR) regime has moved from emerging to mainstream. More than half of survey respondents – 53 per cent – have now had direct experience with a customer going through SBR, up sharply from prior years.

But experience does not equal satisfaction. Industry opinion on SBR is genuinely ambivalent. When respondents were asked about process clarity, quality of practitioner communication, and whether outcomes met expectations, there was no strong consensus that the regime is delivering. Roughly one in three respondents actively disagreed with positive statements about SBR outcomes.

For AICM, the priority is improving creditor communication standards within SBR processes and clarifying practitioner obligations to trade creditors. This sits firmly on our advocacy agenda for 2026–27.

Technology: Racing ahead on AI, leaving eInvoicing on the table

The technology data reveals a striking divergence, shown in Figure 9. Eighty eight per cent of respondents are now actively exploring

or using AI in their credit operations – up from 69 per cent in 2024. Six per cent report broad use across their credit processes, 35 per cent limited use, 11 per cent are at pilot stage, and a further 35 per cent are reviewing options. The momentum is remarkable.

Contrast this with Peppol eInvoicing: 31 per cent of respondents are completely unaware of what it is, and 16 per cent have actively decided not to adopt it. Only 21 per cent are planning adoption within two years.

This gap is an advocacy opportunity. eInvoicing addresses real pain points – payment timing,

“We are racing ahead on AI but leaving eInvoicing on the table – and the business case for eInvoicing is stronger than many realise.”

disputes, invoice reconciliation, accounts receivable processing – and the government mandate is approaching for larger suppliers, with flow through effects across supply chains. AICM will be championing Peppol eInvoicing adoption as part of its Digital Transformation advocacy in 2026–27.

Conclusion

The 2026 AICM Risk Survey paints a picture of a profession under sustained pressure but responding with professionalism and purpose. The macro environment is difficult – and credit teams know it. But 60 per cent improved or held their collections performance. Eighty eight per cent are exploring AI. Fifty three per cent have direct SBR experience. These are not the numbers of a profession in retreat.

The challenges ahead are real: rising insolvencies, fraud, regulatory change, and the unresolved question of what data credit professionals will be able to access to do their jobs. AICM is actively engaged on all of these fronts – at Treasury roundtables, in joint industry submissions, and in the rooms where decisions are made.

Your survey responses are what put us there. We look forward to sharing the full survey report at aicm.com.au and to continuing this conversation through the Credit Intelligence Series and our ongoing member engagement in 2026. 

Nick Pilavidis FICM CCE Chief Executive Officer, AICM

The 2026 AICM Risk Survey was proudly supported by CreditorWatch.

“The technology data reveals a striking divergence, shown in Figure 9. Eighty-eight per cent of respondents are now actively exploring or using AI in their credit operations – up from 69 per cent in 2024.”

Manage business risk

Start Date 12 May 2026

End Date 13 May 2026

Start Time 12:30 pm AEST

End Time 4:30 pm AEST

Venue Virtual classroom

Contact Name Education team

Contact Phone 1300 560 996

Contact Email aicm@aicm.com.au

Max. Attendees 12

Who Can Register? Anyone

LEARNING OUTCOMES:

Risk management underpins many aspects of credit management. Robust Policies and Procedures ensure risks are managed effectively, and will strengthen sales and ensure legal compliance requirements are adhered to. We usually think about risk management in terms of credit applications and assessing individual credit entities risk. Quality risk assessment requires a thorough understanding as to why Policies and Procedures are created and how they operate on a daily basis, and are sometimes modified. This course addresses the following:

Identify application of risk management strategies to job role:

z Research legislative and regulatory requirements and appropriate risk management standards relating to risk management and relate them to your own job role

z Access and accurately interpret organisational policy and procedures for risk management

z Clarify and confirm risk management roles with relevant stakeholders.

Apply risk management strategies:

z Determine appropriate organisational strategies and tools for controlling risks

z Identify and apply control measures for crossorganisation risks

z Choose and implement control measures for own area of operation and responsibilities.

Identify and propose changes to improve risk management strategies:

z Maintain currency of understanding and application of risk management strategies

z Audit and review risk strategy implementation to improve treatment of risks

z Recommend improvements in risk management, relevant to own job role, to management

z Model best practice risk management in own performance.

This course covers the content for the unit of competency BSBOPS504 – Manage Business Risk which forms part of the FNS51522 Diploma of Credit Management qualification. CPD POINTS: 10 points per course.

Members: $775 per person (GST free)

Non-Members: $995 per person (GST free)

UPDATE Economic

Energy shock pushes Australia into a high-risk phase

Patrick Coghlan MICM Chief Executive Officer CreditorWatch

Australia’s credit landscape has entered one of its most precarious periods in more than a decade. The combination of escalating energy prices, persistent inflation and renewed interest rate pressures is driving business insolvencies toward new highs. For Australian credit teams, the data paints a clear picture: risk is rising sharply – unevenly across industries, but universally across supply chains.

Insolvencies are high, and likely to rise further

Business failures and B2B payment defaults have been at or near record highs since mid2025, and February saw a sharp rebound in insolvency activity. Our modelling warns that this uptick is only the beginning, as the recent energy shock places additional strain on alreadystretched balance sheets.

The catalyst is the sudden spike in global oil prices following conflict in the Middle East. The rise, already within the historically recession linked range of 50–70% – poses a

significant and sustained threat if elevated for more than several months. As Ivan Colhoun, CreditorWatch’s Chief Economist, notes, previous periods marked by this scale of energy price escalation have tipped economies into recession.

Australia in the ‘Recession Risk Zone’

The RBA’s February rate rise – and the possibility of another soon – adds further pressure. With inflation proving stubborn and global volatility intensifying, Australia now sits firmly in what CreditorWatch describes as the “recession risk zone”.

Compounding the challenge is the growing probability of genuine fuel supply disruptions, reminiscent of the acute shortages experienced during the COVID era supply chain shocks. A prolonged closure of the Strait of Hormuz – through which 20% of global crude and LNG passes – could push prices dramatically higher and disrupt essential economic activity.

“A prolonged closure of the Strait of Hormuz – through which 20% of global crude and LNG passes – could push prices dramatically higher and disrupt essential economic activity.”

Essential industries are now the most exposed

One of the most significant insights for credit teams is that the sectors with the highest strategic importance are now those facing the greatest stress. Industries with heavy diesel, petrol, gas and electricity consumption –including agriculture, mining, manufacturing, construction and road freight transport – are now absorbing rapid and substantial cost increases.

These pressures are being transmitted rapidly through supply chains. Higher freight, energy and input costs flow directly into wholesale prices, contract variations and credit terms – creating a cascading risk effect across dependent industries.

Road Freight Transport: The critical pressure point

No sector illustrates the challenge more clearly than road freight. With fuel accounting for up to 40% of operating costs, the 36% surge in diesel prices over just two weeks has hit operators hard. BRI data shows 7.1% of road transport businesses closed in the past year, making it one of the most stressed parts of the economy.

This is particularly concerning for credit teams as freight sits at the centre of the Australian supply chain. When transport operators become distressed, the risk quickly spreads to manufacturing, retail, agriculture and construction.

Manufacturing: Payment arrears rising

Manufacturers already facing higher input and freight costs are now experiencing deepening cashflow pressures. Our Business Risk Index data shows 60 day payment arrears are up 9.4% year on year, an early warning sign that insolvencies may accelerate across the sector. Energyintensive subsectors – construction materials, chemicals and metals – are at elevated risk as both energy and transportation costs rise.

Construction:

Hit from all directions

Construction, still recovering from its postCOVID wave of failures, is again under pressure. With a failure rate of 5.8%, high diesel usage and rising material costs, many

builders – particularly SMEs – face renewed financial strain. Subcontractors remain especially vulnerable, with construction ranked second worst for payment defaults across all industries.

Agriculture and Mining: Mixed but rising risk

Agriculture is feeling the squeeze from higher diesel and fertiliser costs (urea is up more than 50% year on year). Mining remains relatively insulated due to strong commodity prices, though energyintensive operators could face margin pressure should global demand soften.

Payment stress flashing red

ATO tax defaults surged at the end of 2025, and B2B defaults – one of CreditorWatch’s strongest leading insolvency indicators – are rising across

multiple sectors. Historically, these metrics show distress well before insolvency numbers peak, suggesting more failures are likely over the next 6–12 months.

For credit teams, this means tightening monitoring, adjusting credit policies and preparing for higher debtor risk – especially among SMEs with thin cash buffers.

The Outlook: High alert for credit professionals

The convergence of inflation, energy volatility and interest rate pressure is creating one of the toughest operating environments businesses have faced in years. SMEs remain the most vulnerable.

If oil prices remain above US$125 150 for several months, recession odds rise sharply, and

“If oil prices remain above US$125-150 for several months, recession odds rise sharply...”

business failures with them. A swift resolution to the conflict would obviously be the best outcome. Until then, credit teams should prepare for:

z Higher trade credit risk across fuel exposed industries

z More frequent payment delays and arrears

z Increased insolvency activity through 2026

z Supply chain disruptions that spill over into credit performance 

Patrick Coghlan MICM Chief Executive Officer CreditorWatch

www.creditorwatch.com.au

Mitigating RISK

Scorecards with a conscience: Driving performance without losing the human in collections

Michael Chatfield Managing Director Australia

InDebted

Across Australia, expectations of credit and collections teams are changing. Regulatory guidance continues to place greater emphasis on fair treatment, early hardship identification and sustainable outcomes. At the same time, many organisations are managing higher volumes of customers under financial pressure in a tighter economic environment. It is expected that recent and future decisions by the RBA will increase this pressure.

In this context, the way performance is measured carries more weight than it once did. Whether they sit within KPI frameworks,

“Regulatory guidance continues to place greater emphasis on fair treatment, early hardship identification and sustainable outcomes.”

management dashboards or monthly reporting packs, collections metrics shape daily decisions and influence behaviour at scale. They determine what teams prioritise, how success is defined and where effort is applied.

For credit leaders, these performance frameworks are no longer just tools for tracking results. They increasingly form part of the organisation’s governance, influencing customer outcomes, compliance risk and long term portfolio health. The question facing many teams is whether their current mix of metrics reflects the standards now expected of responsible credit management.

Why traditional scorecards fall short

Most collections scorecards have historically focused on activity. Calls made, messages sent,

“What gets measured shapes how collections work is carried out. When volume dominates performance frameworks, it tends to drive behaviour in predictable ways.”

accounts worked. These metrics are easy to track and compare, but they tell an incomplete story.

High activity does not always translate to effective recovery. It offers limited insight into whether customers understand their options, whether repayment plans are affordable or whether support is provided when circumstances change. When activity is overweighted, pressure can build quickly, increasing the risk of customer fatigue, complaints or arrangements that fail soon after they are set up.

What gets measured shapes how collections work is carried out. When volume dominates performance frameworks, it tends to drive behaviour in predictable ways.

Shifting the focus from activity to outcomes

More effective scorecards place greater emphasis on outcomes that hold over time.

Financial measures such as liquidation, conversion rates and repayment speed will always be essential to track. But their value increases when they are paired with indicators of quality and sustainability. Plan completion rates, early default rates and average repayment affordability provide clearer insight into whether outcomes are likely to endure.

Responsible scorecards also include customer care indicators. These may include hardship identification rates, escalation timeliness, complaint volumes or resolution times for

complex cases. When these measures sit alongside financial outcomes, they reinforce the importance of balanced judgement in day to day decision making.

Balancing recovery and responsibility

Scorecards that reflect both recovery and customer support help credit leaders manage risk more effectively.

They provide teams with clearer expectations, support more consistent treatment and align performance with regulatory intent. As expectations around proactive hardship identification continue to evolve, performance frameworks that recognise real world complexity enable stronger outcomes for both customers and organisations.

Publishing scorecards as a tool for learning

Transparency can lift performance when it is used with intent. At InDebted, clients that publish and actively use partner scorecards have seen liquidation rates around 20% higher than comparable peers, suggesting that visibility and regular review support stronger outcomes.

For some organisations, this involves sharing performance scorecards with in house teams. For others, it means reviewing reporting with one or more external partners across the credit

“Scorecards that reflect both recovery and customer support help credit leaders manage risk more effectively.”

“As expectations around proactive hardship identification continue to evolve, performance frameworks that recognise realworld complexity enable stronger outcomes for both customers and organisations.”

lifecycle. In each case, the purpose is the same: to create shared visibility into what is working well and where improvement is needed.

Used this way, scorecards become learning tools. Focusing on trends and progress over time helps teams identify strengths, uncover issues early and understand the impact of change. Regular, constructive discussion matters as much as the data itself. Performance information paired with context and coaching supports continuous improvement more effectively than data viewed in isolation.

Whether teams operate internally, with a single partner or across multiple partners, this approach builds consistency, accountability and trust.

Designing scorecards for real operating conditions

Collections teams are working in increasingly complex conditions. Financial hardship is more widespread, and frontline conversations often carry emotional weight.

Scorecards should reflect this reality. Identifying vulnerability, escalating support appropriately and taking time to resolve complex cases are meaningful outcomes.

Recognising these actions within performance frameworks supports team wellbeing and improves long term results.

Defining good performance in a changing environment

Clear performance frameworks are a defining feature of responsible credit management. They guide decisions, influence behaviour and shape outcomes beyond the reporting cycle.

Thoughtfully designed scorecards help organisations achieve strong recovery while maintaining fair and consistent customer treatment. They provide a practical way to align commercial performance with governance

expectations and long term risk management. In a complex operating environment, measuring performance with this level of intent gives leaders a steady foundation for sustainable improvement. 

Michael Chatfield

Managing Director, Australia

InDebted

Michael Chatfield is Managing Director for Australia at InDebted, where he leads local strategy, operations and client partnerships, driving growth across enterprise markets. He has over a decade of experience across the full credit lifecycle, including risk, fraud, identity, open banking and collections. Before joining InDebted, Michael led solutions sales at illion, overseeing revenue across its full portfolio, and held senior leadership roles at Experian. He also served as general manager at TalkingTech. Michael is focused on delivering modern, digital first approaches that improve outcomes for both clients and consumers.

“Collections teams are working in increasingly complex conditions. Financial hardship is more widespread, and frontline conversations often carry emotional weight.”

Risk, liquidity and customer outcomes: Redefining the role of external partners

Daniel Taylor MICM CCE CEO, CCSG Group of Companies

For too long, many financial institutions and corporates have approached receivables and recovery through a narrow procurement lens. Requests for Proposal (RFP’s) are built around commission rates, panel breadth and transactional capability. The outcome is predictable: providers compete on price, margins are compressed and the strategic value of the function is eroded.

Yet, at the same time, executive teams are asking a very different question: “how do we reduce delinquency, improve liquidity and protect customer relationships in an increasingly volatile environment?”

There is a clear disconnect. Working capital and credit risk are strategic priorities, but the way organisations procure external support remains tactical and cost driven. This gap is now becoming a material risk.

The most progressive financial institutions have already begun to shift their thinking. They no longer view external partners purely as recovery agents. Instead, they see them as an extension of their risk, customer and resilience frameworks. This change in mindset

is delivering measurable improvements in cure rates, customer retention and loss outcomes.

The broader corporate sector is only now beginning to recognise the same opportunity.

The hidden cost of cheap recovery

The traditional procurement model assumes that lower commission equals lower cost. In reality, this is rarely the case. A provider selected purely on price often compensates through volume driven processes, limited engagement and lower investment in technology and training.

The result is slower resolution, lower recovery rates and poorer customer experiences. Delinquency persists longer, provisions increase and internal resources are stretched. The true cost is borne through higher write offs, reduced liquidity and reputational exposure.

In contrast, organisations that partner with high capability providers often see earlier resolution, improved engagement and

stronger long term outcomes. The difference is not marginal. In many portfolios, even a small improvement in early stage cure rates can materially impact profitability and capital allocation.

This is particularly evident in sectors such as auto finance, SME lending and commercial trade credit, where customer relationships and timing are critical.

Early engagement is not escalation

One of the biggest misconceptions is that involving external specialists early in the customer journey signals a failure of internal capability or represents a premature escalation. In reality, the opposite is true.

Early engagement is a form of risk prevention. It provides access to specialised skills in customer communication, hardship

identification and structured resolution before accounts deteriorate. It allows institutions to stabilise customers, preserve relationships and avoid more costly downstream outcomes.

The financial services sector has demonstrated that this approach improves both commercial and regulatory outcomes. Customers are more likely to engage when conversations occur early, while institutions benefit from improved transparency, governance and defensibility.

“A provider selected purely on price often compensates through volume-driven processes, limited engagement and lower investment in technology and training. The result is slower resolution, lower recovery rates and poorer customer experiences.”

For corporates, the opportunity is equally compelling. Many continue to engage external providers only after internal processes have been exhausted, by which time the customer relationship may already be damaged and recovery options limited.

Rethinking procurement through a risk lens

If delinquency is a risk metric rather than an operational inconvenience, procurement frameworks must evolve accordingly. Several practical shifts can help organisations move beyond price led decision making.

Focus on total portfolio performance rather than commission rates

Evaluation criteria should include cure rates/ collection rates, speed of resolution, customer retention and the ability to identify early distress. Providers should be measured on their impact on working capital and risk, not simply their unit cost.

Build earlier touchpoints into the operating model

This may include structured referral triggers based on behavioural signals rather than ageing alone. Technology and predictive analytics now make it possible to identify risk well before traditional arrears thresholds are reached.

Adopt hybrid engagement models

Rather than replacing internal capability, external specialists should operate as an integrated extension of the organisation. Shared data, aligned governance and consistent customer experience are essential.

Reward innovation and prevention Contracts should incentivise improved cure

rates, customer stabilisation and reduced delinquency. This encourages investment in technology, training and advanced engagement strategies.

Embed compliance and customer outcomes as core selection criteria

Regulatory scrutiny and ESG expectations continue to increase. Selecting partners with strong governance frameworks protects both brand and balance sheet.

The role of legal and restructuring expertise

Another area often overlooked in procurement is the strategic role of legal and restructuring partners. Engaging legal expertise only at the point of enforcement misses a significant opportunity. Proactive legal involvement can improve documentation, support structured repayment programs and reduce disputes. It also strengthens auditability and ensures that organisations can demonstrate fair and consistent treatment of customers.

In complex portfolios, early restructuring advice can prevent insolvency, preserve enterprise value and improve recovery outcomes. This is particularly relevant in the current environment, where many businesses are experiencing temporary liquidity stress rather than fundamental insolvency.

From recovery to resilience

Ultimately, the shift required is cultural. Organisations must move from viewing collections as a cost centre to recognising it as a strategic lever for resilience. This requires alignment between finance, risk, procurement and customer functions.

“Proactive legal involvement can improve documentation, support structured repayment programs and reduce disputes.”

It also requires executive sponsorship. When working capital performance is treated as a board level priority, procurement frameworks naturally evolve to support long term value rather than short term cost savings.

The institutions leading this change are building ecosystems of internal and external capability, supported by advanced technology and strong governance. They are focusing on prevention, engagement and stabilisation rather than enforcement.

A call to action

The question facing organisations in 2026 is not whether they can reduce collection costs. It is whether they can reduce delinquency.

Those that continue to buy recovery as a commodity will struggle to keep pace with rising risk, regulatory complexity and customer expectations. Those that embrace

a more strategic, partnership driven model will be better positioned to protect liquidity, strengthen customer relationships and navigate uncertainty.

For credit professionals, this represents a significant opportunity to reshape the conversation. By challenging traditional procurement models and advocating for early, specialist engagement, the function can play a central role in improving financial resilience across the economy.

The future of working capital will not be defined by who collects the cheapest. It will be defined by who prevents delinquency in the first place. 

Daniel Taylor MICM CCE CEO – CCSG Group of Companies Board Member – Australian Institute of Credit Management

eInvoicing: A proven opportunity businesses can’t afford to overlook

Mark Stockwell Senior Director, eInvoicing Australian Taxation Office

Businesses today face no shortage of technology priorities competing for their attention and investment. With so much focus on emerging technologies and their potential, it is worth pausing to ask: are organisations overlooking digital improvements that are proven, available now, and capable of delivering measurable returns with comparatively low risk and cost? eInvoicing is one such opportunity. When comparing the modest cost to implement eInvoicing against the measurable benefits it delivers, the case is compelling. By embracing eInvoicing, businesses can improve productivity, reduce administrative costs, enhance security, and support their ESG targets while also future proofing for the global movement to eInvoicing and eReporting.

What is eInvoicing?

eInvoicing is different from the traditional methods such as paper, PDF and email or entering invoice data in portals, and therein lies the power. eInvoicing is the exchange of standardised and structured invoice data between buyers’ and suppliers’ software via a secure network.

It doesn’t matter what eInvoicing software you are using, any business set up to send or receive eInvoices can exchange eInvoices with any other eInvoicing enabled business. Being able to keep using your existing software means, the cost and effort to start doing eInvoicing is modest, a tiny fraction of what it would cost to implement an ERP or an Accounting solution.

The Australian Government has adopted Peppol framework as the default standard for eInvoicing in Australia. The Government has been promoting eInvoicing as a more efficient and secure way for businesses including SMEs (Small and Medium enterprises) to manage their invoices.

Productivity and financial benefits

eInvoicing facilitates an efficient method for automating invoicing processes, providing increased productivity and reduced admin costs. With eInvoicing:

z Businesses sending eInvoices will benefit from timely and accurate delivery of their invoices, save time spent on chasing missing

“eInvoicing is the exchange of standardised and structured invoice data between buyers’ and suppliers’ software via a secure network.”

emails, chasing late invoices, can enjoy faster payments and better management of receivables.

z Businesses receiving invoices will save time and money currently spent on scanning, data entry, following up missing information and fixing errors when processing invoices.

z Better quality data will help businesses to further streamline their accounts payable processes, improve accuracy and reduce errors.

z It can also deliver other potential benefits, including better customer and supplier relationships, decision making supported through data analytics, and help reporting obligations, such as Payment Times Reporting.

Enhanced security

In addition to the productivity benefits, eInvoicing can also help to improve the security of business transactions. eInvoicing provides increased security for businesses since invoices are sent and received via a secure encrypted network bypassing the need to use email, helping to eliminate emails and PDFs as possible attack vectors. This can help mitigate the risk of your businesses becoming the victim of a false billing or payment redirection scam and reduces the number of opportunities for attackers to send viruses disguised as PDF invoices. All of this can help reduce the risk of theft and loss of money, data, or sensitive information, keeping you, your trading partners, and the community safe.

Supporting ESG goals

eInvoicing can also help businesses meet their ESG targets by reducing the environmental impact of their invoicing processes through reduced paper usage, minimized energy consumption for mailing and processing invoices, and decreased greenhouse gas emissions, and demonstrating good governance through the enhanced accuracy and security eInvoicing provides.

A smart priority in a crowded technology landscape

For organisations weighing where to invest their digital transformation budgets, it is worth recognising that not all technology decisions carry the same level of certainty. eInvoicing stands apart in that the pathway is well established, the standards are proven, the implementation support is readily

“eInvoicing can also help businesses meet their ESG targets by reducing the environmental impact of their invoicing processes.”

available, and the benefits are tangible and measurable. It is a relatively rare opportunity to make a meaningful, low risk improvement to core business operations – and one that should not be deferred while attention is focused elsewhere.

A globally proven standard

Peppol has been used in Europe for over a dozen years, so it is a proven product. The Peppol Framework is a set of procurement standards, legal agreements and an eInvoicing delivery network that is used by nearly 50 nations worldwide, including New Zealand, Singapore, Malaysia, Taiwan and Japan in our region and now across the Middle East, to facilitate the exchange of eInvoices and other procurement documents.

In Australia, the ATO is appointed as the Australian Peppol Authority, its role is to govern the framework. The ATO manages the changes to specifications, accredits service providers who are required to meet ISO27001 security standards.The ATO can’t see eInvoices transmitted through the network and does not collect any invoice data.ATO also works with many stakeholders across the economy to drive adoption, currently driving a Business to Government mandate.

The ATO has worked closely with many large companies, including Bunnings, Woolworths and AusPost to determine the value of Peppol for digitally mature businesses and implementation impacts for their customers and suppliers. These companies are now eInvoicing champions, supporting their trading partners’ transition to this new invoicing channel and reaping mutual benefits.

“The Peppol Framework is a set of procurement standards, legal agreements and an eInvoicing delivery network that is used by nearly 50 nations worldwide... to facilitate the exchange of eInvoices and other procurement documents.”

Getting started

The ATO are also working closely with eInvoicing solution providers to have their products be eInvoicing ready, including a range of free and low cost solutions for small businesses with simple invoicing needs.Many businesses are already enabled via their existing software, making your supply chain more efficient and secure. The more of your trading partners that get eInvoicing enabled the greater the benefits that will be seen by everyone as the network of businesses using eInvoicing grows.

Getting started with eInvoicing has never been easier, with more and more eInvoicing ready products available on the market. The ATO website provides practical guidance, tools, and resources to help businesses of all sizes understand their options and take the next step. The opportunity is clear, the path is well supported, and the time to act is now. 

To find out more about eInvoicing, and to start exploring your options, visit ATO.gov.au/eInvoicing

Mark Stockwell

Senior Director, eInvoicing, Australian Taxation Office E:eInvoicing@ato.gov.au

Insolvency

Insolvency isn’t slowing – neither should credit managers

Lachlan McKinnon MICM CCE Manager – Restructuring and Recovery Vincents

Insolvency has been and remains a persistent risk plaguing the credit industry. As 2026 commences, insolvencies (both corporate and personal) are continuing to trend upwards, driven by sustained higher inflation, geo political matters, labour shortages and increasing supply costs. As a result, credit managers are required to be increasingly vigilant and adjust their management and assessment processes to account for the heightened danger created by these rapid developments and ever present insolvency risk.

It’s not all doom and gloom however, while dealing with an insolvent customer may be an increasing problem, a well armed AICM member can ensure that the debtor is adequately protected.

“As 2026 commences, insolvencies ... are continuing to trend upwards, driven by sustained higher inflation, geo-political matters, labour shortages and increasing supply costs.”

Current Trends

Total external administrations in FY25/26 are anticipated to be at record highs, with ASIC data showing an ~8% increase from calendar year 2024 to 2025. With this increase, there has been also a shift in the appointment type weighting, specifically Small Business Restructuring Appointments falling from historical highs (albeit a short history) of new appointments in FY24/25 from ~25% down to ~10%. The fall in this type of insolvency appointment is likely the result of further ATO pushback (and more stringent acceptance criteria) as we move further beyond the pandemic period.

The corporate insolvency data shows that the historical industry offenders remain consistent; with building and construction, accommodation and hospitality and other services accounting for 48.9% of the total external administrations for the 12 month period ending 31 December 2025.

As insolvency numbers continue to rise, the ATO is urging small businesses to stay on top of

Corporate Insolvency Appointments by Industry

Source: ASIC Data

their tax debts or risk firmer recovery actions as it accelerates efforts to collect more than $50 billion in unpaid tax. In a recent media release, the ATO reiterates that it is not a bank or a cheap source of finance.1 It is apparent that the ATO is showing no signs of slowing down when it comes to recovering taxation liabilities.

In addition to the above, as members of the AICM are aware, the ATO continue to utilise Director Penalty Notices as a key form of collection and debt management. In a recent report issued by the Tax Ombudsman, it was noted that in FY24/25 the ATO increased the number of DPNs issued to more than 84,000 DPNs to directors of approximately 64,000 companies (a 136% increase on the previous year).2 We are finding that DPN recipients are more actively seeking to place entities into

Group (CY 2025)

Construction

Accommodation and Food Services

Other Services

Retail Trade

Professional, Scientific and Technical Services

Transport, Postal and Warehousing

Administrative and Support Services

Manufacturing

Rental, Hiring and Real Estate Services

Health Care and Social Assistance

Financial and Insurance Services

Information Media and Telecommunications

Wholesale Trade

Arts and Recreation Services

Mining

Agriculture, Forestry and Fishing

Electricity, Gas, Water and Waste Services

Education and Training

Public Administration and Safety

external administration shortly upon receipt to limit personal liability (and the threat of bankruptcy).

On the topic of personal insolvency, in CY24/25 total personal insolvencies increased by 7% on the previous year. This, however, is still less than half of the pre pandemic numbers.3 Recent statistics released by AFSA for the quarter ending 31 December 2025, identify that 31.2% of the individuals entering personal insolvency in this period were business related.4

Minimising the risks

With the above in mind, the situation is far from hopeless. The AICM provides members with various education and training opportunities to better understand the process,

Total Insolvency Appointments by Calendar Year

Source: AFSA and ASIC Data

identification of solvency issues early and ways to mitigate loss in an insolvency event (or shortly prior to an insolvency event).

From the perspective of an insolvency practitioner, here are some of my thoughts and suggestions (and anecdotal experiences) that may assist credit managers:

Understanding the financial position

When conducting credit assessments, credit managers should develop a robust understanding of the creditor, directors and guarantors, their contingent liabilities and any other business interests of those parties. Credit managers are more than capable of reviewing

and interpreting financial statements, however, what if these statements provide a false reality?

In my experience, “expenses of a Company” may not necessarily be expenses of a “Company”. I frequently see director’s utilising the Company’s bank accounts as their own, paying for excessive lifestyles, gambling and eating at the finest restaurants, all under the guise of “costs of goods sold”. A small café owner does not need to lease a $550,000 Ferrari to run the business, especially when the Company has a $500,000 taxation debt.

All too frequently, I receive Xero and MYOB files which contain twelve months and thousands of unreconciled transactions because of the director’s (and/or bookkeeper) lack of interest

“When conducting credit assessments, credit managers should develop a robust understanding of the creditor, directors and guarantors, their contingent liabilities and any other business interests of those parties.”

in completing the task. Credit managers would also be shocked to know how many of these files contain substantial reductions to loan account balances entered by way of manual journal entry (where there has clearly been no repayment). These out of date accounting files, surprisingly, do not stop a “creative” accountant from preparing financial statements that have the appearance of substance, creating a false reality and which may be provided to credit managers.

Having seen many instances of this myself, credit managers should be mindful that director loan accounts recorded on the balance sheet may in fact be Division 7A loan accounts,

attracting personal taxation implications for the director – further impacting a director’s ability to meet a personal guarantee.

The question stands, “how can a credit manager identify these issues before it’s too late?”. In my experience, it all starts with understanding the underlying transactions. Credit managers should explore trends in the P&L and Balance sheets, look for outliers, obtain and review the account transactions and ask the relevant questions around valuation of specific assets or liabilities. This can be as simple as obtaining confirmation on when an entities stock balance was last reconciled to a stock take or delving into the

“Insolvency has been and remains a persistent risk plaguing the credit industry. ... As a result, credit managers are required to be increasingly vigilant and adjust their management and assessment processes...”

collectability of aging debtors. If something doesn’t seem right, it usually isn’t. An informed credit manager is an armed credit manager.

I would highly encourage credit managers to scrutinise the documentation provided and to take a wholistic approach to assessment (and continued assessment). Early identification of these threats (or intentional omissions) will provide credit managers with opportunities to foresee insolvency risks and act accordingly.

Perform routine checks of the creditor (and guarantors)

Too many times, I see that a debtor’s position, once protected by a personal guarantee, has been compromised due to an undisclosed transfer of assets or further interests registered over the guarantor’s personal property.

Recently, I am seeing instances of lower tier lenders and lending to companies, taking not only a Fixed and Floating Charge over the entity but also obtaining a mortgage over the director’s personal property. This can very quickly absorb all available equity in a guarantor’s property leaving credit managers with no real asset to pursue against the guarantor in the event of a default. If this is identified, immediate reassessment of the credit risks involved is required.

Performing ongoing routine searches to better profile at risk customers, or even asking relevant questions, can lead to a more accurate financial snapshot to assess credit risks. A $20 title search can save a lot more in the long run.

Ensure perfection of security interests

Credit managers must ensure that any security is properly perfected. A perfected security interest will allow debtors to take possession of the secured assets with few (or no questions) asked. The AICM has provided training in relation to security interest perfection, I highly recommend that credit managers frequently refresh on the requirements and review the security documentation.

“Performing ongoing routine searches to better profile at risk customers, or even asking relevant questions, can lead to a more accurate financial snapshot to assess credit risks.”

Considering this, it may be time to seek legal advice in relation to credit agreements to ensure that the relevant clauses of the (sometimes dated) agreements will provide debtors appropriate security and powers to collect. Many credit providers have failed to perfect security interests simply through outdated clauses in the credit agreement. A perfected security interest will allow a debtor to recovery supply provided on credit and may

assist in defending an unfair preference claim against the debtor (if a nasty liquidator was to bring one).

Engagement with the Appointee

If an insolvency event occurs, all hope is not lost. Engagement and sharing information with the Appointee may lead to avenues of recovery (specifically sharing the credit applications / personal asset position statements) that may have not been immediately apparent to the Appointee. This is particularly important in instances where a director may be concealing assets (or has a structure in place) to prevent the Appointee from recoveries for the benefit of creditors.

While insolvency risks remain elevated, preparation is critical. Credit managers who remain informed, proactive and engaged (and who leverage the education, tools and support available through the AICM) place themselves in the strongest possible position to mitigate risk, protect recoveries and navigate insolvency events with confidence.

“... it may be time to seek legal advice in relation to credit agreements to ensure that the relevant

clauses of the (sometimes dated) agreements will provide debtors appropriate security and powers to collect.

”

The thread running through these trends is clear: insolvency risk has become faster moving, more data driven and less forgiving of slow decision making. For credit teams, the advantage now comes from identifying signals earlier, tighter documentation, and having the right advisors on call before a customer tips into formal administration. 

Lachlan McKinnon MICM CCE Manager – Restructuring and Recovery Vincents

FOOTNOTES:

1 https://www.ato.gov.au/media-centre/ato-urgessmall-businesses-to-take-simple-steps-to-avoidcompliance-action

2 https://www.taxombudsman.gov.au/wp-content/ uploads/2025/12/Systemic-reviews-refreshed-workplan-2025-26.pdf

3 https://www.afsa.gov.au/about-us/statistics-andinsights/headline-statistics/financial-year-personalinsolvency-statistics

4 https://www.afsa.gov.au/about-us/statistics-andinsights/quarterly-personal-insolvency-statistics

Identifying

Shifting fraud trends and growing exposure for credit professionals RISK

Christopher Drodge

Principal Product Manager

Equifax

Economic pressures continue to serve as a primary catalyst for financial fraud. Total fraud listings over the 2025 calendar year grew by 4.0% (vs same time in 2024) as rising financial strain heightened consumer vulnerability, making individuals easier targets for scams and money muling.

Fraudsters are narrowing their focus toward high value targets; for instance, big ticket credit items like vehicles and commercial assets saw a 112% surge in fraud listings. As bad actors leverage GenAI to produce

“Unlike non-credit fraud, which often involves systemic threats like money laundering, the financial loss from credit fraud is felt instantly with the risk of unrecovered principal ranging from a $5,000 credit card limit to over $1 million for a mortgage.”

sophisticated deepfakes and automated document manipulation, the industry is facing a move toward quality, where the high capital involved in these targets represents a critical risk for immediate financial loss.

Credit fraud returns to the forefront

For the past three years, non credit products dominated fraud listings. However, 2025 saw a significant shift in this long term trend, with credit fraud volume listings jumping by 11.1%

while non credit listings experienced a slight contraction of 1.1%.

For credit professionals, this shift represents an immediate and direct financial risk. Unlike non credit fraud, which often involves systemic threats like money laundering, the financial loss from credit fraud is felt instantly –with the risk of unrecovered principal ranging from a $5,000 credit card limit to over $1 million for a mortgage.

The explosive surge in money muling

Perhaps the most alarming shift is the dramatic rise in money mule activity. Driven by escalating financial hardship, the volume of money mule listings grew by a massive 90.9%, now accounting for 14.6% of all fraud listings.

Money mules – individuals who transfer illicit funds on behalf of others to obscure their original source – are often recruited via social media under the guise of work from home opportunities. While some are aware of their role, others are unwitting participants manipulated by criminal networks. This activity typically targets non credit products like bank accounts but poses a significant reputational and regulatory risk for any business whose services are paid for with compromised funds.

First-party

fraud accelerates as identities are manipulated

The market is witnessing a move away from simple identity theft toward sophisticated identity manipulation. While identity

Share of total listings

First party fraud year-on-year growth in credit volume listings

“First-party fraud or ‘loan manipulation’ – where a genuine applicant provides false or conflicting information – is accelerating...”

takeover remains the largest category, its share of total listings fell to 49.8% in 2025, down from 62.1% in 2024. This is supported by a 16.6% decline in volume listings, suggesting that our collective understanding of fraud is becoming more nuanced and specific. For example, accounts that were previously classified broadly as identity takeover are now being reported as money mule activity.

First party fraud or ‘loan manipulation’ –where a genuine applicant provides false or conflicting information – is accelerating, with volume listings growing by 25.5%. This type of fraud now accounts for 31.6% of all

listings. The use of GenAI has lowered the barrier for individuals to create high quality falsified payslips and bank statements, often reducing the need for external criminal assistance.

Niche threats see aggressive growth

While still representing a small portion of total listings (1.1%), specialised, high impact categories like synthetic identities and bust outs surged by 96.5%. Synthetic identities –profiles created by combining real and stolen data – are notoriously difficult to detect because they can bypass traditional verification and remain dormant for long periods.

Bust out fraud, where a bad actor obtains credit with no intention of repayment, typically results in multiple missed payments within the first 90 days. These niche threats are being fuelled by deepfake technology and automated document manipulation,

Share of total listings

“Bust-out fraud, where a bad actor obtains credit with no intention of repayment, typically results in multiple missed payments within the first 90 days.”

signalling a move toward quality and sophistication by bad actors.

Global Spotlight: Canada and Brazil

Equifax operates across diverse international markets to monitor shifting criminal tactics. To provide some insight into this broad view, this report spotlights recent metrics from Canada and Brazil – regions selected due to their comparable market sizes and fraud environments which offer parallels to the Australian landscape.

In Canada, synthetic identity fraud more than doubled over a two year period, frequently targeting younger consumers. This trend is mirrored in the mortgage sector, where over 95% of fraudulent Canadian mortgage applications involved the falsification of financial information –a clear parallel to the first party fraud trends observed locally.

In Brazil, data reveals a rapid escalation in technical methods, with fraud attempts surging by 117.5% in Q1 2025 compared to the previous year. While suspected cases rose by 41.5%, confirmed fraud cases actually fell by 3.4%. This disparity demonstrates the vital importance of real time anti fraud technology in preventing loss before it occurs, particularly as scammers increasingly adopt automated, AI enabled tactics.

Mitigating the Risk

The persistent affordability gap continues to underpin these fraud trends, with Equifax Consumer Market Pulse Q4 2025 data showing a marked increase in financial stress across

“By leveraging multiple data points, powerful trust signals, and Artificial Intelligence, credit professionals can better position themselves to identify potential anomalies and protect business interests in an increasingly complex environment.”

the board. Late stage delinquency values have surged for personal loans (10%), BNPL (7.4%), and mortgages (6.8%), while credit card arrears for 18 to 25 year olds have jumped 28.8% year on year.

To mitigate these escalating risks, credit professionals should adopt a multi layered approach that secures every customer interaction with less friction. Last year, Equifax processed 97 million searches across its identity and fraud capabilities, helping to prevent over $1.5 billion in attempted fraud and returning that saving to the Australian economy. By leveraging multiple data points, powerful trust signals, and Artificial Intelligence, credit professionals can better

position themselves to identify potential anomalies and protect business interests in an increasingly complex environment. 

Christopher Drodge Principal Product Manager Equifax

www.equifax.com.au

The data insights in this article are from the Equifax Fraud Index Report 2026, which aggregates data intelligence from the Equifax Identity and Fraud Digital Solutions, enriched with proprietary, public and third-party sources. Download the full 2026 Fraud Report here

The content of this document is provided for information purposes only. It does not constitute legal, accounting or other professional financial advice. Further, the information in this document is provided on the basis that all persons accessing it undertake responsibility for assessing the relevance and accuracy of its content. Should you consider it necessary, please seek your own legal, compliance or professional financial advice for application of any this information to your own circumstances.

Caught Out!... (I - E = TROUBLE)

Kirk Cheesman MICM Group Managing Director NCI

The Australian Men’s T20 World Cup tournament finished virtually as quick as it started. Touted as one of the favourites, Australia was essentially ‘caught out’, ill prepared and far from being on top of their game.

“But they won the Ashes over the summer” I hear you say and “who really cares about a World T20 trophy?”

Well, the moral of the story is while teams and businesses can have their eyes on successes of the past, bubbling away under the surface are various conditions that can creep up quickly, and you can get caught out when not really expecting it.

Let me explain.

Conditions are constantly changing. Businesses are having to flip and change all the time

due to changing environments. Interest rates reduced and everybody cheered “Hooray”. Inflation returned and quickly interest rates rise again. This has had an immediate effect, especially on the retail industry with respect to reduced consumer spending.

Outside of interest rates, share markets, commodity pricing, exchange rates, and now a Middle Eastern war wreak havoc into confidence, supply and industry shocks, which can quickly impact how businesses need to react.

One concerning data signal NCI monitors is the overall anticipated credit sales of our client base. Unexpectedly during the COVID period, sales and demand boomed and inflation meant product and services increased in value with overall sales increasing by 18% at the peak. Fast forward and recent estimated sales have flatlined to a consistent 1% across the board.

“...while teams and businesses can have their eyes on successes of the past, bubbling away under the surface are various conditions that can creep up quickly, and you can get caught out when not really expecting it.”

“With reducing sales and increasing costs margins are being squeezed so much so we anticipate more business will surrender (become insolvent) in the near future.”

At the same time costs continue to rise at inflated levels mainly due to staffing, IT and more recently (and perhaps in the very near future) borrowing costs.

I (income) – E (expenses) = trouble for the mid-market economy.

With reducing sales and increasing costs margins are being squeezed so much so we anticipate more businesses will surrender (become insolvent) in the near future.

My concern is for the mid market private sector businesses in Australia and New Zealand.The ‘Fat’ between income and expenses is not at

a sustainable level. Staying afloat may rely on more bank funds, more expensive financing or even requiring the directors and owners to tip in extra money to keep the business operational.

This formula spells trouble.

While dipping slightly at the end of 2025, overdue adverse reports and collection actions generally are still much higher than a satisfied economy.

Likewise a slowing of credit insurance claims in November and December of 2025 meant a much higher than normal start in January and February of 2026.

“The conundrum for business is either to grow income, (higher productivity or increase prices) or be more efficient with their labour and minimise the increasing cost dilemma.”

The construction sector, which for NCI’s data is normally a key driver of a rebound in the economy, has not yet kicked up.

Essentially, the activity has not been high enough and the governments are still asleep at the wheel in trying to generate more new home builds, (even against their own targets).

The Risk Outlook

Major concerns for the private mid market business sector in Australia and New Zealand is the (I – E) formula. The conundrum for business is either to grow income, (higher productivity or increase prices) or be more efficient with their labour and minimise the increasing cost dilemma.

Businesses, just like the Australian men’s cricket team, need to be prepared for the next tournament, past successes mean nothing for future achievements. Being well prepared and safeguarding your business against the unexpected is the whole purpose of trade credit insurance.

As the credit risk coach of your business, make sure you are well prepared for the upcoming conditions and have a ‘plan B’ for the unexpected. 

Kirk Cheesman MICM Group Managing Director National Credit Insurance (Brokers) Pty

Ltd

E: kirk.cheesman@nci.com.au www.nci.com.au

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