The Creditinfo Chronicle
According to the International Standards on Combating Money Laundering and the Financing of Terrorism and Profileration, Financial institutions are required to conduct due diligence on their customers. They have a special obligation to verify customer information. Financial institutions need to examine in detail the relationship between individuals and companies and whether the individuals in question are politically exposed.
The process of obtaining this information can be complex and time consuming, but with the help of Creditinfo it is possible to significantly ease the process so that employees can focus on more demanding tasks. Creditinfo in Iceland have a number of solutions available that can assist financial institutions with due diligence:
Company registration information
According to the guidelines from the Icelandic government against money laundering and terrorist financing, it must be verified that the individuals acting on behalf of a company are specifically authorized to act on its behalf. Using Creditinfo, it is possible to get a detailed overview of the managers of the company, its purpose, registered capital and information about board members.
When conducting due diligence, financial institutions need to investigate the beneficial ownership of their customers. It is common for individuals to own companies through other companies. Such relationships can be complex and it can be difficult to find out exactly who the individual owners are and their individual stake at the company in question. Creditinfo can assist in obtaining detailed information about the individuals who actually own companies and how large their share is. The beneficial ownership report also contains information from the register of limited companies. Now there is also information about the beneficial owners according to the Icelandic Revenue and Customs office in the Beneficial owners report.
It is not sufficient to examine customer information only at the start of a business relationship. It is equally important to maintain regular monitoring of customers and their relationships. With the help of Creditinfo it is possible to monitor changes that take place in information about specific companies, e.g. submission of new annual reports, changes in the company’s board of directors or changes in ownership. Such information is necessary to keep a close eye on your customers. Now it is possible to monitor changes in beneficial owners who own more than 25% of the company in question.
Politically Exposed Persons (PEP) – Coming Soon!
Creditinfo has begun preparing a database that will include information on Politically Exposed Persons (PEPs) to assist companies in meeting anti-money laundering requirements. In processing the information, Creditinfo consults with the Data Protection Authority in accordance with the provisions of the Data Protection Act. Individuals who will be registered in the database will have good access to the information and will be notified of its processing.
Find out about the subscription options available at Creditinfo Iceland. Visit www.creditinfo.is for more information about our solutions and services.
2020 was, to say the least, an eventful year. The highlight of the year was the COVID-19 epidemic, which revolutionized the entire world this year and continues to affect 2021. The first case of COVID-19 was diagnosed in Wuhan, China at the end of December 2019 and the first confirmed death related to the virus was confirmed on January 11th 2020. News of the virus began to increase in Iceland as the number of infections outside China increased.
Specific mentions of the word COVID-19 was not not mentioned until the end of February last year. When the first infection was diagnosed in Iceland on 28 February, Icelandic media coverage of the virus increased significantly and reached a certain peak in mid-March, shortly after the World Health Organization declared that the spread of COVID-19 was classified as a pandemic. After that, the number of news items began to increase significantly, but at its peak, 372 news items were broadcast about COVID-19 on March 20, 2020. A total of 41,492 news items containing the word COVID were broadcast this year.
Institutions and companies in the news in 2020
As in previous years, political parties in Iceland were the institutions that received the most mentions in the Icelandic media in 2020. A total of more than 14,000 news items were broadcast about the Independence Party (Sjálfstæðisflokkurinn) in the past year and about 12,000 news items were broadcast about the Left Greens (Vinstri-Grænir). The effect of COVID-19 can be seen when looking at the high-jumpers on the list of the institutions that were most frequently mentioned in the Icelandic media in 2020. The Directorate of Health was in third place this year among the institutions that were most in the news in 2020 but were in 37th place in 2019. The National Police Commissioners Office was in fourth place in 2020 but was in 45th place in 2019 with a total of over 11,000 news items.
When the list is narrowed down to companies it is clear that one company was particularly popular among the press. A total of 6,000 news items were broadcast about Icelandair this year, followed by Decode Genetics with about 3,100 news items. After them, it was the three commercial banks Íslandsbanki, Landsbankinn and Arion Bank that were most covered in the Icelandic media in 2020.
Would you like further information about media monitoring solutions from Creditinfo Iceland? Please contact us.
Cooking is the basis for relationships.
For many, family mealtime has been lost in our over-scheduled lives. Family meals provide an opportunity to come together, strengthen ties and build better relationships. They are an opportunity to reconnect and handle the stresses of daily life – build a sense of belonging.
Food confers the status and identity with which we distinguish ourselves from others and at the same time gives us the sense of community we seek. Those who eat as we do have a connection with us; they are as we are.
Let’s gather around the table or on the mat and eat together this season. This book is a glimpse of the different forms of communal dining in our Creditinfo ecosystem. Whether in Iceland or Guyana – “Dinner is served!”.
We’re about to eat, so drop what you are doing and join us.
Download the whole Creditinfo Cookbook for offline viewing here.
Interview with Thimal Perera – Deputy CEO, DFCC Bank
Our Senior Business Development Manager, Joe Bowerbank, caught up with Thimal Perera, Deputy CEO of DFCC Bank. Thimal provided a number of interesting insights into how DFCC is strategically dealing with the challenges of operating in 2020 and building a roadmap to continue delivering a first-class banking experience going forward. Thimal has worked in both local and international banks across the globe, looking after a number of different areas from SME and retail, to digital transformation amongst others. This interview focuses on digitalization and credit risk – two areas that have been hot topics for Creditinfo’s clients this year.
Ever more personal data will in the future determine whether people can get a loan or buy goods on installment. If a person consents, before a decision is made about granting them credit they may be asked for permission to examine not just repayment of past loans but also other private information: what model of phone they have, whether they actively use mobile internet, whether they often do not answer calls. It may even be suggested that they play a real-time game whose outcome will determine whether they as a customer are creditworthy.
While companies that give credit have typically relied only on information gathered by financial institutions, now more and more personal data will influence decision-making. Whether credit is granted, how much, and on what terms may depend on whether a customer is ready to share that information.
“There’s no doubt that personal data can only be used with the person’s consent,” Creditinfo Head of Decision Analytics for the Baltic states, Maxim Fetisov immediately stresses. “But practice shows that openly sharing additional information increases a creditor’s trust, lets them more accurately assess each customer’s trustworthiness, and even allows customers to expect more favorable credit terms.” Research conducted by Creditinfo has shown that knowledge about a customer’s personal habits gives creditors just as many insights as formal data.
A recent conference “Scoring Kitchen” by Creditinfo, which rates the creditworthiness of companies and individuals in more than 50 countries, addressed what is new in the scoring process. For example, a study was done together with telco company on how people’s financial reliability relates to their everyday behaviour. Analysis of the data revealed that even how long people use one telecom operator’s services shows which ones are financially more trustworthy: the longer someone uses the same telco’s services, the more financially reliable their loan-payment history is too. And on the contrary, customers who frequently change operators generally demonstrated a higher level of riskiness.
Those without 4G and who use mobile internet little fall into a higher-risk group
Creditinfo analyst Allan Anyona, who took part in the study, also notes that individuals who are less financially reliable tend to have more modest internet plans and rush to connect as quickly as possible to free Wi-Fi networks at home and elsewhere.
Moreover, it was observed that the more advanced the network connection a potential customer’s phone supports, the greater their creditworthiness. So customers using phones that support 4G network requirements are seen more favorably than those whose phones only work on a 2G network or do not make such information available.
Many missed calls points to a frequent debtor
Creditors get useful insights as well from data about whether a potential customer often fails to answer incoming calls. People were divided into five categories: those who fail to answer calls very often, often, an average amount, rarely, and very rarely. It turns out the most financially reliable were those in the last two groups. The riskiest customers, meanwhile, were among the people who “miss” calls more often than others.
“We assume that people experiencing financial difficulties avoid answering calls as they do not want to talk with creditors or with relatives to whom they may also be in debt,” the Creditinfo Group analyst explains.
With smart devices revealing more and more information about consumers, creditors are eager to actively look at other habits too – like the use of a mobile wallet. The more punctually a customer tops up their mobile wallet limit and the bigger their income, the higher their credit rating will be. Conversely, the smaller someone’s income is and the longer they use credit provided by a telco, the more cautiously other lenders will view them. So those people should not be surprised if they are not allowed to buy a more expensive item on installment or are refused a bigger credit limit on a payment card.
Games show how you will behave with real money
Seeking to get a more objective assessment of a customer’s creditworthiness and to automate the decision-making process, psychometric data are being used ever more actively. A future customer may be asked to play a quiz that takes 5-7 minutes. It may be a series of questions, like: how would you use an unexpected gift of €200 – would you spend it on entertainment or save it? Studies show that the customers who meet their financial obligations most responsibly tend to choose the answer ‘I would save it’ in the game, while the riskiest customers more often choose ‘I would spend it on entertainment’.
“We realize that over time skilled players learn to choose those answer that creditors view more favorably. But in calculating any individual’s rating, dozens of other factors are also assessed, like their insurance history, repayment of earlier loans, payment of utilities bills, and so on,” CEO of Creditinfo Lithuania, Aurimas Kačinskas notes.
The pandemic also altered how companies are rated – there are new factors
The CEO of Creditinfo Lithuania says the challenges of the pandemic in 2020 are also changing the rules for rating businesses. New factors have arisen that impact credit scores. For instance, a new indicator for the impact of Covid-19 has altered the current ratings of companies all over the world. It shows how the coronavirus pandemic has impacted every area of business (e.g., tourism, hotels, manufacturing, transport, etc.) and how companies’ creditworthiness relates to the geographic location of their operations, demand for the goods they produce, and possibilities for quickly recovering after restrictions and quarantine end. Businesses’ ratings are also heavily influenced by a ‘Collection’ indicator that reflects whether a company punctually settles with its creditors.
“We have no doubt that the new factors that are coming up will have an increasing significance for companies’ credit scores – in a time of economic turmoil, it’s very important for creditors to objectively assess every customer’s riskiness and make the most accurate decisions possible,” Maxim Fetisov, Head of Decision Analytics in the Baltics says.
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 bureau and 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:
Marketing Director, Creditinfo Group
Creditinfo and Mala’a’s strategic partnership started in January 2019 and since then, the teams have been developing a state of the art Credit Bureau System, connecting members, integrating with new data providers, and ensuring the system is protected to the highest security standards.
On November 18th 2020, Mala’a officially launched its state-of-the-art Credit Bureau System to the banking sector in Oman. This announcement affirms Creditinfo’s commitment in helping businesses globally make better use of information and data, along with providing the latest software solutions to enhance risk decisioning strategies. Creditinfo have over the years strengthened our partnerships with Credit Bureaus globally by delivering Creditinfo’s technology with core credit bureau systems, infrastructure expertise, operational set up, self-service platforms, alternative data, digital lending solutions among other tailored services.
Creditinfo will continue partnering with Mala’a into the next phase of our project. The teams will be ensuring we expand the membership to new sectors such as telecommunication and insurance and delivering new value-added services like Instant Decision Solutions, Mobile Lending Platforms and Portfolio Management tools. This will help lenders and organizations improve the application process and the customer experience for Oman residents.
Lenders across the GCC are changing the way in which they operate and make decisions on an individual’s creditworthiness moving to a digital based approach while harnessing traditional and non-traditional data. With Creditinfo Gulf based in Muscat now firmly installed in the region Creditinfo will remain at the forefront of facilitating access to finance in each of our markets and help lenders to reduce risk and increase profitability. We look forward to continuing assisting with cutting-edge technology in the region and helping Lenders and Telcos increase profitability without increasing the risk of new business.
Gary Brown, MD, Creditinfo Gulf.
Creditinfo West Africa today marked a major milestone by hitting the 20 million contracts threshold and growing, in the regional Credit Information Bureau (BIC) making it a historic day for Creditinfo West Africa, the entire UEMOA region and Creditinfo Group.
It is customary to assume that the reputation and image of a company is mostly a prerogative of the general manager and the marketing unit. Credit is also given to employees who are in direct contact with the customers, yet financial decision-makers mostly go unnoticed. In this article, I will share some ideas about the huge influence Chief Financial Officers may have on the good corporate image.
Kateryna has been appointed as GM of IBCH, a Credit Bureau and Analytics company in Ukraine in which Creditinfo has been a strategic investor since 2006.
Players in Baltic Markets (Latvia, Estonia) and Iceland Measure Risk better, benefitting from Covid-19 Impact Score Developed by Creditinfo.
Credit providers need to understand how COVID crisis affected their counter-parties and customers in order to better manage risk exposure and reduce losses. Current scoring models are unable to fully answer these needs as they were developed on pre-crisis data and need time to adjust to new conditions.
On Tuesday 28th July, Safaricom (the largest mobile provider in Eastern and Central Africa), launched a new service offering consumers the opportunity to buy a 4G-enabled smartphone for as little as 600 KSH (6 USD) per month for nine months, with an initial deposit of 1,000 KSH (10 USD). This is a high-impact initiative for the country, where the average monthly disposable income is just 8,500 KSH (85 USD) according to a 2019 report from the Kenyan National Bureau of Statistics.
Together with partner IT company “Onoy” Ishenim has developed innovative mobile app that enables Lenders to collect customer’s digital consent to access his social fund data and credit report. Mobile app uses biometric verification technology (face recognition) to remotely verify person’s identity and create digital signature that is needed to submit consent. In case of successful verification solution calls Social fund to collect information about person’s income and then makes inquiry to Credit Bureau for credit report. All income data collected by mobile app is stored in Ishenim’s database together with other data. This data will be used by Lenders to verify customer’s self-reported income and also in credit scoring models.
While Skype and Zoom become the new office, we had the great pleasure to interview two titans of the credit industry; Paul Randall – Global Markets Director at Creditinfo Group, and Oscar Madeddu, Senior Advisor at IFC, World Bank. With a new reality unfolding through disruption of to our daily life, we felt the necessity to ask the veterans of our industry what the future could look like in a post-COVID society. We asked our interviewees to share ideas on how the crisis will impact economies, credit, credit reporting and what authorities around the world are and should be doing to safeguard borrowers, lenders without endangering the integrity of credit reporting databases.
Lithuania‘s transformation to the startup-friendly country has been successful: last year the first “unicorn” appeared in the market, and the startup ecosystem at present includes over 900 enterprises which have the great potential for business development based on innovations. And yet, the general conception of the startups’ contribution to the country’s economy has remained stereotypical, as it is alleged that these are risky enterprises which rapidly emerge and dissolve, and that they create few workplaces. The latest analyses done by “Creditinfo” and “Startup Lithuania” reject these stereotypes.
We interviewed Catherine Muraga the Chief Information Officer (CIO) at Stanbic Bank Kenya – one of the largest banks in Africa. Catherine is well versed with the Information Technology (IT) landscape having worked in different industry sectors including Manufacturing, Airline and Banking industry. She provides strategic vision and operational IT leadership for the Information Technology Department and controlling all IT functions. We asked her a few questions around COVID-19 and how Stanbic Bank is working around this pandemic.