The Creditinfo Chronicle
The key to success (my humble opinion): Any lessons from credit-vibrant Iceland to small population countries?
By Reynir Finndal Grétarsson – Founder, Creditinfo Group
In 2010 I decided to go back to University and learn Anthropology. This is the discipline that deals with human behavior in wide and holistic manner. Why do humans behave as they do? After graduating in 2014 with a bachelor’s degree, my understanding of the complex organism that is the modern human being increased just a little bit. The most important thing I learnt was that different behavior of different groups of people could be explained by what we call culture.
This is not saying much. Culture has been defined countless of time. It is a subjective term, but in short it is about what people does and how. Behind that are the motives, knowledge, values, beliefs, etc. I believe that the most important thing for companies, which are one form of groups of people, is its culture. You might point at some of the greatest companies in the world and say that they came about because of great ideas. I would say that the initial ideas were rarely novel, but elaboration (or even plagiarism) of someone else’s ideas. Why did those groups of people succeed and not other groups with similar ideas? Sure, luck plays a role. But luck is also about being prepared when opportunity arrives. Most important is the mindset of the founders and their team in creating a culture of success. And then to add to the team people who fit into that culture.
We started a small company in Iceland in 1997. In 2002 we started expanding to other mainly smaller markets, focusing on those with high growth potential in the long term. We now have offices in 25 countries (last count). Iceland is still the most important part of the company, contributing more in revenues and profits than any other country, yet it is the smallest in population. Why?
It is firstly the culture of the country. Icelanders like new things. To start internet-based service in Iceland in 1997 was easier than in some other European countries many years later. Icelanders are usually in hurry and very demanding. They want things now. Call me biased, but to open a bank account or register a company, as examples, is easier that anywhere else, at least for locals. Iceland has the highest proportion of payments being made electronically. Cash is disappearing. Secondly, the company culture, at the heart of which lies respect and appreciation towards one’s colleagues. You don’t just give orders and expect people top follow; you explain them and are prepared to listen to reasons why things should be done differently. Of course, the boss is the boss, but he/she must be reasonable. This has the effect of improving decision-making. I have often been guided towards a better approach by my colleagues. And knowing that you will be questioned, you avoid asking for things that serve limited purpose. In short, you won’t get away with nonsense. What you ask the people to do has to serve a purpose that is in line with the overall goals of the company.
I recently read the autobiography of General Georgi Zhukov, he mentions officers who do not respect their common soldiers. He says that they are stupid as this results in the soldiers not being ready to fight as hard as they can for their officer.
I think that the reason for the tremendous success of Creditinfo Iceland is the fact that we have been fortunate in finding the right people. Not only good professionals, but also good people who respect their colleagues and in that way are in line with the most important part of the company culture.
We can say that Iceland success can be seen as the result of business intuition & social listening with perfect timing & great professionals blended together.
Last but not least: luck. Iceland was prepared for our services and you never really know beforehand if this is the case. Luck is always a factor in business, although by our professional team adapting our services to meet the changing environment, we have stayed lucky for over 20 years!
Artificial Intelligence (AI) is currently growing at a fast rate, and is becoming a hot subject in the industry globally. Individuals and organizations alike, are now moving towards that direction in order to increase efficiency and maximize on profits while lowering costs for themselves and their businesses.
Creditinfo has worked on an automated machine learning (ML) model generation platform, which delivers impressive levels of automation, and user-friendliness to apply state of the art artificial intelligence algorithms to the finance sector data.
Our pipeline will enable analysts to securely build and deploy highly accurate adaptive machine learning models with very limited human intervention making it a great tool for credit bureaus and financial institutions.
Our ML pipeline requires four easy steps:
– Drag and drop your dataset.
– Choose target variable.
– Build state of the art models; visualize weights of the main predictors.
– Deploy the best model.
The pipeline uses a wide spectrum of algorithms such as logistic regression, K-nearest neighbor, random forests, naive Bayes, stochastic gradient decent, linear SVC, decision trees and gradient boosted trees. The platform mainly focuses on deep learning algorithms and allows to effortlessly deploy them.
For more information on our ML model, please contact Dmitry Borodin.
Afghan Credit Guarantee Foundation partner on first-of-its-kind Credit Risk Scorecard for Afghan SMEs
LONDON, UK, 26th June 2019 – Creditinfo Group, the leading global credit information and fintech services provider, today announced that it has entered into a strategic partnership with ACGF – Afghan Credit Guarantee Foundation to develop a Credit Risk Scorecard aimed at small-to-medium enterprises (SMEs) in Afghanistan. As the first SME credit scorecard to be developed for the Afghan market, the joint solution will not only increase profitable lending to the market, but also provide a host of societal benefits such as great wealth generation and increased employment, as a result of opening up affordable, formal credit to SMEs in the country.
As a global supplier of credit bureaus and credit risk solutions, Creditinfo has been active in Afghanistan since 2013, in partnership with the Central Bank of Afghanistan. ACGF was established in 2014, following a decade of a successful performance by its institutional predecessor Credit Guarantee Facility for Afghanistan. ACGF operates in Afghanistan with the aim of boosting financial inclusion in the Afghan market by providing credit guarantees and Technical Assistance (TA) to financial institutions with the ultimate objective of facilitating SME lending.
ACGF has been at the forefront of driving the Afghan credit industry forward for 15 years. In the challenging economic and political environment of Afghanistan, the organisation utilises its funds effectively to create wide-reaching developmental impact. Since inception ACGF has cumulatively guaranteed USD 219m of loans, supporting 5,500 SMEs. Furthermore, as per the end of 2018 estimations, 45% of all business loans in Afghanistan have been guaranteed by ACGF.
The partnership between Creditinfo and ACGF will see the development of a cutting-edge technique for assessing the credit risk of SMEs granting credit. It will also enable credit providers to extend credit to SMEs who are currently unable to access credit. The solution will be used at the point of application by SMEs for credit, and will enable lenders to make more informed decisions, and extend more credit than is currently possible.
Creditinfo brings its industry-leading Credit Risk Analytics knowledge and experience to the table, alongside its intimate knowledge of available data in Afghanistan from its work running credit bureaus in the region. ACGF will bring its vast experience dealing with several leading local credit providers to the partnership, which includes a goldmine of data, knowledge and, ultimately, end users for this product.
Mr Benjamin Riley, Senior Global Consultant, Creditinfo, commented on the partnership: “Our unique insight into the Afghan credit market, combined with our previous work with the Central Bank of Afghanistan, will help in creating a robust and reliable measure of SME credit worthiness in the country. This will have a significant positive impact on the national economy, by opening up access to more affordable and stable credit to SMEs. Creditinfo is delighted to be given the opportunity to work alongside ACGF to help the country deliver these much-needed changes.”
Mr Bernd Leidner, Chairman of Management Board, ACGF added: “Globally, SMEs are the driving force behind economic growth, generating employment opportunities and wealth. However, access to affordable and stable credit is a key factor in the success of the sector. Afghanistan is no different in this respect. For years, we have been dedicated to opening up financial access to Afghan businesses. Our next initiative, alongside our trusted partner Creditinfo, will ensure we’re providing the local market with the required tools, consultancy and advice to not just survive, but thrive.”
Established in 1997 and headquartered in Reykjavík, Iceland, Creditinfo is a provider of credit information and risk management solutions worldwide. As one of the fastest growing companies in its field, Creditinfo facilitates access to finance, through intelligent information, software and analytics solutions.
With more than 33 credit bureaus running today, Creditinfo has the largest global presence in the field of credit risk management, with a significantly greater footprint than competitors. For decades it has provided business information, risk management and credit bureau solutions to some of the largest, lenders, governments and central banks globally – all with the aim of increasing financial inclusion and generating economic growth by allowing credit access for SMEs and individuals.
For more information, please visit www.creditinfo.com
About ACGF – Afghan Credit Guarantee Foundation
ACGF – Afghan Credit Guarantee Foundation is a charitable foundation based in Cologne, Germany. ACGF’s mission is to improve access to finance for Small and Medium Enterprises (SMEs) in Afghanistan by providing credit guarantees and technical assistance to Partner Institutions (PIs) – banks, micro-finance and micro-deposit institutions. ACGF is closely supported by its local subsidiary – SME Client Support Afghanistan (SCSA) with offices in Kabul and Mazar-i-Sharif.
Babel for Creditinfo Group
+44 (0)207 199 3977
Translated version of the interview with Sidimohamed Abouchikhi, CEO of Creditinfo Morocco.
Image credit: Finance News.
Interview by Momar Diao
At the global level, Credit offices are open to any kind of information to assess the risk of a customer. Which is not the case yet for the Morocco. Elsewhere, data telecom operators, water and electricity suppliers give financial institutions the opportunity to better understand their customers.
Finance News weekly: How did Creditinfo Morocco perform during the first quarter of 2019? And what are your projections for the year 2019?
Sidi Abouchikhi: As we already announced previously, the number of consultations by the Credit Bureau has surpassed 2.5 million in 2018 and this upward trend continued for the first quarter of the year 2019 in alignment with our forecast.
Regarding value-added services, we recorded a high demand on our services of Monitoring, Alerting and Scoring. This trend is a reflection of the actions carried out by the financial sector to “air out” its portfolio of credits for more of risk management and to comply with regulatory, increasingly strict prerogatives with the IFRS 9 standard which came into application recently.
In terms of strategy, we note that institutions implement transformation programs in the areas of Risk management, which is likely to increase their appetites for the use of the ‘Big data’. Rightly, Creditinfo continues to support the financial system through innovative services and solutions of digitalization able to support these transformations.
F.N.H.: In Morocco, credit bureau activities are open to the water, electricity sector and the Telecom and insurance sectors. What does this mean concretely?
S.A.: The integration of this kind of so-called alternative data fits into the process of natural evolution to a Credit Bureau. At the global level, Credits offices are open to any kind of information to assess the risk of a customer. This is the case for Creditinfo that manages this data in its Credit offices in Europe, the Middle East and Africa.
For example, in West Africa, data telecom operators and suppliers of water and electricity give financial institutions the opportunity to better locate their clients in a more relevant manner, regardless of the timing .i.e: at the beginning of the granting credit or during its collection.
In Morocco, the integration of such data is a real opportunity to develop a new generation of financial products and services and, consequently, to increase financial inclusion to a large section of the population that accesses, or in a very limited way, to financing, without forgetting the TPE which are today at the heart of all policies public development and require, too, a fundraising effort on the part of the financial system by more suitable products.
F.N.H.: Is Creditinfo, today, equipped and endowed with the necessary expertise to accompany the above sectors?
S.A: As a global leader in the sector, we manage the data in 20 of our Credit offices worldwide. This kind of data is considered to be classic, despite its novelty in some countries. Creditinfo has tech solutions and proven expertise to manage data of Telecom operators and water and electricity suppliers as well as data from financial systems.
In other markets, Creditinfo uses a new generation mobile data as the metadata for mobile phones. The idea is to capture the maximum possible information to enable the creation of models with more power and predictive algorithms, paving the way for a more automated process of granting credit, cost reduction for promotion of financial inclusion.
F.N.H.: Finally, how do you manage customer risk at the level of banks and micro-credit associations?
S.A.: The culture of risk management is well established in the Moroccan banking system. Thanks to devices that control risk, the banking system is backed by rating agencies, demonstrating its resilience and ability to adapt to changes imposed by the transformation in digitization and regulation. The risk trend remains stable without significant deterioration throughout the first quarter of the year 2019. For micro-credit associations, the overall trend of risk has improved following the adoption of the report of solvency and scores provided by Creditinfo.
However, the increase in the threshold of 150.000 DH funding is to push microcredit associations to transform and equip themselves with solutions that enable a better knowledge and assessment of the customer and better management of the cycle life of the credit.
Paul Randall was recently at the Kafalah SME Financing Conference in Riyadh, Saudi Arabia, and he tackled these 2 questions during the panel discussion.
What are the specific challenges of assessing credit risk of SMEs as compared to larger firms and how can fintech can help lenders address those?
“There are 3 main areas of a difference and I could summarise this by talking about the “3 P’s”: Pertinent data, Profitability and Pride. The availability of formal data in regard to the pertinent data, the profitability the cost of gathering data and pride relates to the different skill set.
For Pertinent data we can consider for large corporates that balance sheets, profit and loss financial ratios cash-flow provide a huge amount of data. When it comes to small businesses this formal information is often not available. However in the future we will see the use of open banking data, mobile wallet data, credit bureau and invoice information data like for example, Amazon who through their invoice information, are likely to be one of the biggest global lenders to SME in the future.
When we look at the Profitability for small business lending historically, we see that it has been low because of the cost of data and the relatively low volumes compared to retail. When the information is a gathered automatically and decisions are made digitally then the cost reduces and a profitability increases.
The final point perhaps I was a little bit harsh using the word “Pride” with my “3 P’s”. What I mean here is that the skill set for underwriting corporate loans is very different to that of underwriting small businesses especially when an automated process is used, so it has been important to separate the departments of corporate lending and small business lending to really be effective in this area”.
What are some of the key innovations that are seen in credit reporting and credit scoring today that have the potential to transform the SME finance space and reduce the credit gap?
“The core concept that fintech credit bureaus are supporting is data fusion. This is the process of gathering data from multiple sources and bring it together.
So where does this new data come from for SME decisions? We have data from mobile wallets so the transaction data that is made in mobile wallets in different markets can be data from open banking sources – so transactional data in the banking environment. From there we can then identify data on the internet or from mobile scraping so to bring together the information on activity that the companies are undertaking such as making news articles and traffic on their websites. At Creditinfo for example, we are working with a number of lenders and use the mobile wallet data to support SME lending in Africa.
We have information from credit bureaus that describe many aspects of SMEs. Many credit bureaus will hold information on the payment histories also the credit activity of businesses furthermore they will hold information on any collateral or guarantors or information on the directors or owners”.
Kafalah SME Financing Conference was held in Riyadh, Saudi Arabia where they discussed current financing for SME’s in Saudi Arabia,how to build relationships between private and public FIs, government agencies and legislative bodies that support financing, current and future finance opportunities for specific business sectors and how to increase awareness of the most current international practices for financing SMEs.
Below is an excerpt of Paul speaking during the conference.
Video courtesy of Kafalah and The World Bank.
Picture courtesy of Mazen Skaf.
In his interview with The Gleaner, CEO of Creditinfo Jamaica – Craig Stephen highlighted on the regional success and the goal to venture into other caribbean markets in the near future.
This vision was birthed in 2012 with the start of Creditinfo Jamaica; “to be the leading credit information bureau in the caribbean region, providing consistent and reliable credit and other information to our clients while contributing to national growth and development.”
Read the full story below.
The true spirit of an entrepreneur comes down to passion and determination. At Creditinfo, we meet entrepreneurs every day, and it’s our goal to support these budding business men and women with the appropriate tools, knowledge and access to finance.
Welcome to our #CreditinfoMeets series, where we profile some of the success stories enabled by our partnerships with financial institutions across the world.
First up is Ruby. After falling on difficult times, Ruby made the decision to launch her own business, and quickly realized the benefits of tracking her credit history in real time.
Here’s just a clip of Ruby’s interview, where she tells her inspirational story.
Last week, a leading TV station in Kenya – Citizen TV did a story on Digital Lending Apps and their impact in Kenya. There has been a sharp rise in the number of mobile lending apps in the country and the worry is about how people are accumulating debt and borrowing from the various apps simultaneously and defaulting therefore affecting their credit score.
Watch more on of the story here:
Creditinfo reached out to the station to explain the role of CRB’s and how they benefit individuals. Everyday we strive to change the misconceptions of negative listing and try and educate on the importance of paying loans on time and the benefits of a good credit score.
See the follow up interview below:
The Association of Business and Economics has chosen Creditinfo as the Knowledge company of the year 2019.
Creditinfo Group was chosen as the Knowledge Company of the Year by the Association of Business and Economics. During the selection process, companies that have excelled in their international markets in the recent years were considered. Other companies that also came at the top include CCP, Marel and Nox Medical.
“It is a great motivation for us at Creditinfo to receive the Knowledge Prize,” said Brynja Baldursdóttir, Managing Director of Creditinfo Lánstraust and Regional Manager of Creditinfo Group in N-Europe. “Our business is based on an Icelandic ingenuity that is now in use in 45 countries around the world, keeping pace with this journey of creating value based on knowledge.”
“I am extremely proud that Creditinfo has been awarded the Knowledge Prize 2019, and that we have been awarded repeatedly before in Iceland for growth in job creation, as well as being named as the entrepreneur of the year in 2008,” said Reynir Grétarsson, founder and chairman of Creditinfo Group.
“We are being awarded for creating a valuable business based on knowledge, know-how that we have developed and found many forms and ways to sell in great number of countries. Most people only hear of us when they are declined credit since we have their credit score data. Such awards help remind all of us of the fact that we are creating valuable services that are important for the economy and to improve peoples lives. I am proud and grateful to the entire Creditinfo Group team and what we do for our company. Each and every person in the company plays a role that is necessary for the company to run efficiently.”
“Another milestone achieved thanks to the smart work and passion of our international, multicultural and talented team of professionals worldwide. Thank you to every single one of you, you make Creditinfo thrive!”, added Stefano Stoppani, the Creditinfo Group CEO.
We at Creditinfo Group would like to say a special thank you to the Association of Business and Economics for this recognition.
Creditinfo Jamaica – Craig Stephen was interviewed by The Jamaica Gleaner on importance of Credit Scores
WHAT IS A GOOD SCORE?
Craig Stephen, CEO of Creditinfo Jamaica, one of three licensed credit bureaus operating in Jamaica, said anything above 600 is considered a good credit score.
He said that data collated by a credit bureau in a borrower’s credit file is used to calculate the individual’s credit score, which is determined by five major factors: payment history, debt balance, age, types of credit accounts, and the number of enquiries about the person’s credit history.
Stephen pointed out that potential borrowers must be aware that regular credit checks by financial institutions can affect their credit score.
“It can affect you negatively, especially if there are too many enquires in a short period of time,” he said.
The Exchange on Jamaica News Network – Credit Reporting in Jamaica
CEO of Creditinfo Jamaica Limited- Mr. Craig Stephen along with Chief of Credit Risk Management, JN Bank Limited-Mrs. Keisha Melhado-Forest and Managing Director of a local microfinance company, Paradigm Capital Limited-Ms. Gail Dixon sat down to discuss Credit Reporting in Jamaica.
This was led by Mr Neville Graham of Jamaica News Network-The Exchange and Business Reporter with the Financial Gleaner. The panelists engaged in a hearty discussion which highlighted the perspectives of the Credit Bureau as well as the Commercial Banking and Micro Lending Sectors.
Mr. Stephen spoke to the impact Creditinfo Jamaica Limited has had on the lending market since the Bureau opened its doors in 2013. Some key mentions were: the decrease in default rates within our financial institutions for all loan types, the reduction in interest rates which has been at single digits for various loan products for the past 2-3 years and finally the ease of access to finance which is facilitated by the provision of reliable, objective and simplified information on borrowers through a partnership with Creditinfo Jamaica.
Creditinfo Jamaica’s support also extends to the Jamaican citizens who are able to access their credit reports directly from Creditinfo Jamaica. This is critical to helping borrowers understand their risk profiles, it empowers borrowers to negotiate with their Financial Institutions as well as gain access to other types of services.
Mr. Stephen also stressed the importance of paying bills, installments and revolving loans on time. This is key to maintaining a good history with the bureau which ultimately increases one’s chance of accessing credit in the future.
Being a full-service Credit Bureau, Creditinfo Jamaica not only provides credit information but a whole suite of products such as Instant Decision Solution, Monitoring, Data Analytics and Scoring Solutions to include Behavioral Scorecards such as Social Media Scoring.
Creditinfo Jamaica is a regulated entity. The Bank of Jamaica presently provides oversight. Mr. Stephen along with the other panelists reiterated the necessity that our credit providers support the Credit Bureau eco-system. The sharing of information is critical to promoting financial inclusion as well as ensuring that the eco-system works for all stakeholders. Creditinfo is a global brand, to date, we have extended our reach regionally to include operations in Guyana and Barbados.
Watch the full Video here:
ARTICLE – IQ MAGAZINE INTERVIEW IN LITHUANIA WITH STEFANO STOPPANI
ECONOMICS | DATA ECONOMICS
“Smartphone information can be sufficient to make a credit decision”
Millennials will eventually stop from carelessly distributing information about themselves, but accessible data have a bright side too, thinks Stefano M. Stoppani, the CEO of “Creditinfo Group”, uniting 33 credit bureaus around the world. A discussion held by IQ reporter, Vilius Petkauskas.
Recently, “The Economist” compared data to oil and affirmed that the importance of the former in the XXI century will overpower the black gold. Would you agree with such a statement?
Unfortunately, at this date you can’t pore data in a car’s fuel tank (laughing). On a more serious note, I absolutely agree with such a statement. Nevertheless, it’s not the actual data that counts, but the way it is being used. We are surrounded by personal information, that we create using various devices. For instance, by using smartphones on a daily basis we leave digital footprints, that could be used by companies for various purposes. From that perspective, data is the new oil. Nonetheless important is how we use it though.
The business that you are in charge of empowers finance companies to make decisions weather to grant credit. Do you think this is the right way to use data?
One of the biggest challenges for our company as well as any other business managing large data quantities is to find balance between effective data use and privacy protection. Nobody wants another “Cambridge Analytica” case. Must say that we are a bit lucky in that sense, because for ages data used by financial institutions have been extremely thoroughly supervised. Especially of such companies like ours.
When I worked for the World Bank, I had the opportunity to contribute to the creation of rules and formulation of best practices for credit bureau activities. I worked with several legislators, therefore I am perfectly aware of the fact that data protection is a crucial element to any law defining our activities.
This is one of the reasons why there are so few companies in our industry – data protection is not a cheap thing and reputation in our business is absolutely crucial. The slightest mistake anywhere in the world, let’s say Cape Verde in Africa, would have a tremendous impact for our operations in other countries.
The information you operate does not only consist of financial data, does it?
Absolutely. As of lately, a huge explosion of data has happened, hence new niches for the financial sector.
Banks can already grant credit using alternative data, not only financial, as it was the custom before.
In the countries outside of Europe, especially in Africa and Asia where there are fewer institutional banking clients, providers of small loans have become extremely popular. Such lenders can’t check a clients’ credit history in a bank, because the latter simply have none.
In order to evaluate a clients’ creditworthiness, lenders check one’s data collected via smartphone. Calls, messages and other such things are being evaluated. If we spot messages from debt collectors – it’s a bad sign. We can spot weather a person is using a smartphone for gambling or other activity of such kind.
There are up to 1500 data points that allows to evaluate quite precisely weather a person would be able to pay back a loan. Such technique can be used in Europe as well, especially for Millennials, who avoid financial institutions.
Youngsters may not have a full credit history, but that does not mean that they don’t need a credit or a credit card. Their smartphones contain plenty of information, which can help evaluate creditworthiness. That is why a part of the population that could not have access to credit in the past now have this possibility.
Talking of data usage, one can get the impression that future generations will consider data in a way that we consider smoking half a century ago. Will people demand better protection of their data, or perhaps compensation for usage of their data?
We have to admit that Millennials were quite careless in regard to their privacy and the amount of publicly available personal data. Young people used to share almost every glimpse of their lives without even thinking, sometimes getting in trouble when looking for a job, as potential employers discovered some unflattering images or else. I think that on the long run this generation will admit pushing the limits a bit too far.
Millennials’ parents – I count myself amongst them – were a bit more careful in regard to public information. We were always interested and aware of the information that was spread around about us. I think that on the long run the young generation will say “enough”.
Nevertheless, our industry is interesting in a sense that the basic principles of operation, such as trust-based bank and client communication, remain unchanged. What has changed is the amount of data available and this – to the benefit of the client. In the past, while establishing a scorecard, we only used information about the client, ones defaulting debts and alike, while now we add positive banking information, such as payments effectuated on time.
More to that, we receive information about clients’ communication with non-financial institutions, mobile-operators. This is very important in developing markets, because in some countries we have only information on clients from non-banking sources.
In the Lithuanian public space, the morality of credit scoring has often been questioned, referring to banks that pay attention to numbers rather than the individual behind them. What is your take on this?
I like to say that numbers don’t lie. An objective assessment never lies. It would be unfair to refer to a subjective evaluation. A credit bureau has been set-up to change subjective information into objective. That is why my credit history and data about me show weather I am trustworthy in that sense or not. There is a probability though. I don’t try to affirm that we are all-knowing and never make mistakes. Our goal is to make sure that our scoring is accurate in 85-90% of cases. There might be inaccuracies, however such scoring is way more accurate than relying on a bank’s employee that a customer meets face-to-face.
I can for instance borrow a friend’s fancy car, put on a great suit, pretend I am successful and can meet financial commitments. Would you eventually trust me or my credit history?
Our job is not to make decisions on credit or any other financial product. We only setup a score, while the decision on granting a credit or not is made by the bank. In order to create a score, we use a huge amount of data. A same score for one bank can be too low, while for another bank – be just great. A credit bureau does never make a decision.
We should take a look at it from another perspective as well. While using a credit score, the granting of credit does not depend on the mood of an employee at a given day or weather one has had enough sleep. Scores also allow to avoid cases when a bank give away loans to a same person that they know well. While granting credit, the most important is not who you are, but rather weather you deserve to receive it. At the World Bank we called this a reputational collateral, when people are evaluated not according to the beauty of their house or car, but according to the history of decisions they have taken.
Let’s talk about the field that you are fond of – fintech. According to the licenses given to such companies, Lithuania ranks just under the UK. The politicians, however, start to doubt weather fast expansion does not represent a threat. What do you think of the rapid expansion of financial technologies?
I am old enough to remember the .com bubble, which exploded almost two decades ago. I think that the word fintech is used too freely. If you are not a fintech, you won’t be attractive to investors.
On the other hand, financial technologies have permitted to decrease service costs. Many new-comers have popped-up, who borrow funds using technologies which did not exist before. However, we should not forget that fintech or not, loan providers are none else but lenders.
They can become such due to cheap technology offering, allowing to avoid complex systems used by banks or other financial institutions. Such companies can often avoid strict regulations, applicable for banks, which can be a little bit unfair in regards to the latter.
If a commercial bank has to stick to dozens of strict rules while giving credit, rules shall be applied to other companies providing such or similar services. Nevertheless, market supervisors are often lagging behind technological advance and balance is therefore needed so that innovation is not killed at initial stages.
Fintech gives market dinosaurs an impulse to change. In order not to become one, we have a so called star-up Sandbox here in Lithuania and instead of competing, we provide them access to our data and resources. If they sell something, we get our share and develop products together. We don’t need to argue, we can grow together.
Creditinfo opens new facility in Muscat, Oman to enhance services offered to customers in region
Muscat, Oman, 12 March 2019 – Today, Creditinfo Group, a leading provider of global credit information and fintech services, announces that it is expanding its footprint in the Middle East with the creation of Creditinfo Gulf, the organisation’s regional hub in Muscat, Oman. The new office will support current and prospective Creditinfo clients, with access to a wealth of global expertise, knowledge and technology to enhance the existing financial infrastructure in the region.
Following a recent strategic partnership with the Central Bank of Oman and the creation of the Oman Credit Bureau, Creditinfo continues its commitment to increasing financial inclusion, through further investment into the Middle East to support the national economy. The World Bank estimates that over 1.7 billion people worldwide are “unbanked”, with little to no access to formal finance. It goes on to estimate that only 15% of citizens in the Middle East have access to a bank account.
The new office in Muscat, which became fully operational in February 2019, will see a permanent and multinational team of risk management and financial specialists oversee the digital transformation of financial institutions in the region, including the development of the Oman Credit Bureau and Creditinfo’s other Middle Eastern customers. The team will share knowledge and provide fintech innovation, including the deployment of psychometric analysis and digital onboarding solutions, to increase the speed and accuracy of onboarding new customers.
Today’s announcement reinforces Creditinfo’s commitment to help businesses across a host of sectors to make better use of valuable information. With the organisation’s experience in credit risk scoring and modelling, Creditinfo will be supporting companies across the region to lend responsibly. Part of this will see Creditinfo introduce software platforms in the region such as automated decisioning tools, which allow lenders to capture data from multiple sources and build, deploy and benefit from custom decision-making parameters within seconds, rather than hours or days.
“It is an exciting time across the Gulf region, lenders are changing the way in which they operate and make decisions on an individual’s creditworthiness based on a varied base of traditional and non-traditional data.” commented Gary Brown, Head of Commercial Development – Creditinfo Gulf. “Creditinfo’s goal is to be at the forefront of facilitating access to finance in each of our markets, but also to help lenders reduce risk.”
“The Middle East is an interesting market for financial services and fintech businesses. With such a large portion of unbanked citizens in the region, the new hub will help financial institutions, governments and central banks throughout the Gulf to build and deploy new infrastructures and services to reduce this number,” commented Stefano Stoppani, CEO Creditinfo Group. “This new hub will allow our team to strengthen our offerings and capabilities within this diverse and fast-growing market.”
Babel for Creditinfo Group
+44 (0)207 199 3977
In an emerging economy where the credit reporting industry is in a fledgling state the requirement for awareness building extends beyond general consumer awareness to educating the community of potential subscribers. Given its experiences in developing the credit reporting market, Creditinfo Guyana has taken the decision that in addition to implementing a general public relations programme to also embark on an extensive ‘training’ programme for current and potential subscribers.
Our ‘training’ programme is all encompassing and comprises full subscriber engagement that includes user training and refresher training activities; CEO and Senior Management engagement and presentations; roundtables and seminars to deal with various issues including data quality; timely dispute management and general queries. These sessions also allow for the introduction of new products as well as receiving of very valuable feedback which inform our sales and other strategies.
The challenges experienced in enhancing sales, in particular sales of value-added products, has been determined to be primarily fuelled by a lack of understanding of the company and its offering as well as the scope of the credit reporting industry as a whole. Our efforts are therefore intended to facilitate (a) increased usage of fee based credit reports (b) reduced incidence of nil reports or no credit data found (c) improved quality of data shared (d) enhanced sales of value added products all with the aim of boosting total revenues.
Direct engagements with high level operatives allow for gaining of insights regarding various strategic issues and challenges for which solutions can be provided. For example, a recent outreach to a freight forwarding company that is a potential subscriber highlighted its challenges with receivables. The company’s peculiar circumstances revolve around the issuance of a large volume of invoices payable within relatively short time frames. The opportunity is therefore presented for us to sell more than mere subscription for basic credit reports.
Additionally, if we train users to search properly then usage is likely to increase since the incidence of pulling nil reports will be reduced. Our experience in engaging users in a very interactive manner has encouraged unhindered feedback, clarification of issues they may be experiencing as well as the overall development of their understanding of the correct procedures for accessing credit reports.
Our training and direct engagements with IT Systems operators is also another key contributor as it assists in improving data quality which is necessary to inspire confidence in the value of our services and support the sale of value added products.
As a consequence of our efforts and direct engagements, subscribers are able to clarify issues and gain in-depth insights on interpreting the credit report as we have noted a reliance merely on the credit score without a full understanding of the reasons for that particular score. Another recent outreach, for example, revealed that the trend arrow and reason codes were not even considered in interpreting the credit report and score.
More importantly, the direct, one on one engagement with key personnel who utilize the system provides invaluable feedback on company policy; credit procedures as well as challenges for which new solutions can be tailored thereby creating opportunity for additional sales. In some instances, our capacity [flexibility] to respond to immediate requests for solutions is highlighted. For example, in a recent engagement with a financial institution our inability to respond to their demand for a mobile banking solution within their required time frame is likely to result in a delayed or possibly lost sale.
As subscribers become more familiar with, understand and trust our services we have seen an increasing willingness to call us to discuss possible solutions or request information which our VAPs can provide. Sales, for us, is still an uphill task but we believe that our continued systematic efforts at enhancing awareness and understanding can bear much fruit in positively impacting sales over time. Our mandate in 2019 through these engagements is therefore to build trust, inspire confidence and deliver value.