Open Banking Solutions at Creditinfo

In 2020 Creditinfo Group decided to be part of the Open Banking initiative by starting to investigate the options of using customers’ bank account statements in their offering. The account information service is based on the PSD2 directive. For known reasons, it is not possible and acceptable to have access to customer bank account data without consent.

Creditinfo have tackled the opportunity in two different ways. In the Baltics and Iceland, the chosen route was to apply for an FSA licence to offer end-to-end customer account statements transfer from their home bank to a third party, from whom the customer applies for credit , e.g. car loan. In the Czech Republic and Slovakia namely due to the long and cost-intensive process of “passporting” CI’s Estonian license, the chosen route was collaboration with a local technical partner called Sokordia Tech.

A little bit more about above-mentioned two ways to offer Open Banking solutions in Creditinfo Group.

In 2021 Spring, Creditinfo Estonia received permission from the Financial Supervision Authority to start offering account information services in Estonia, which later in Autumn expanded to the markets of Latvia and Lithuania. Today, Creditinfo has been offering the account information service in the Baltic market for almost three years. Creditinfo have real-time access to the transaction data of customers of banks and financial institutions using a secure data transmission channel and customer consent.

In Spring 2024, Creditinfo Estonia finalised the Iceland licence application process from Estonian FSA and can officially offer account information service in Iceland.

Beside regulative and compliance part, Creditinfo also has full technical integration and capability in developing categorization when offering account informatoin service. With opportunity to access customers bank account data, the aim is to offer more transparent credit risk evaluation to customers and third parties, who find high value from the knowledge of their customers account information to make data-driven, intelligent credit and business decisions.

As mentioned above, Creditinfo also have Open Banking cooperation and partnership in the Czech Republic and Slovakia with fintech company Sokordia Tech, teaming up to capitalize on Creditinfo’s market position  whilst leveraging Sokordia Tech’s AISP and PISP licenses and Open Banking services platform to provide PSD2/Open Banking services to several financial services clients in the market.

In the Czech Republic and Slovakia market, Creditinfo currently has 5 customers utilizing the Open Banking platform, processing more than 1.2 million open banking transactions per month. Depending on the specific requirements, pain points, and use case of the Client, Creditinfo  has developed a “Categorization In-a-Box” , Multi-Service platform called Transaction Analysis Service replete with 40,000 pre-installed business rules that can sit atop and work with any Open Banking Open APIs in any country. The service is comprised of 6 unique methods/services (AIS+CIS+PIS) & PDF tools via one API as detailed below:

  1. PSD2parser: extracting raw data from PSD2 bank statements
  2. PSD2tags: tag each bank transaction with one to N identifying tags
  3. PDFparser: Extracting raw data from PDF bank statements
  4. PDFtags: Tag each bank transaction with one to N identification tags
  5. 1UnitPay: Verification PSD2 payment (the advantage is that the payment is made in one step with statement extraction)
  6. Bank Account Views: Repeated viewing of bank accounts without the need for customer re-authentication

Together with our partner Sokordia Tech, we currently have Open Banking APIs and are able to provide all these services under one single API for the following countries: Czech Republic, Slovakia, Hungary, Romania, and Poland.

Development work on the 3rd generation of the Transaction Analysis Service is currently in development, highlighted by:

  • Deeper AI involvement in processes & rules & analysis
  • Expansion of new online data inputs into transactional analytics
  • Multi-language analytical tools
  • GUI for clients to manage and report transactional analytics themselves

For more information, please visit: www.creditinfo.com

Authors:

Seth Marks – Regional Director Central, Eastern & Southern Europe, Creditinfo Group

Ivo Vallau – Open Banking Product Manager, Creditinfo Group

 

Creditinfo appoints TransUnion veteran as new Global Chief Commercial Officer

Seasoned commercial leader, John Cannon, looks to use wealth of financial and executive leadership experience in new role to unlock new value for customers and drive Creditinfo’s international growth

London – 18 April 2024: Creditinfo, a global service provider for credit information and risk management solutions, has today announced the appointment of John Cannon as its Global Chief Commercial Officer (CCO). With over 25 years of experience in finance and credit bureaus, John will spearhead the strategy and execution behind Creditinfo’s solutions and products for all 30 of its credit bureaus, which are spread across 50 different countries.

John brings almost three decades of experience in leading top-performing teams, delivering pioneering solutions, and galvanising high-value market leading companies within the global financial community. A reputable industry expert, John led Transunion’s GFS business for international regions and has spent the last couple of years as an advisor to Private Equity firms in addition to helping scale early stage technology companies, most recently Xapien.

As CCO of Creditinfo, John will draw on his extensive sector knowledge and experience to leverage Creditinfo’s technology and data to push innovation forward and ensure it meets customer expectations and needs. He will play a key part in promoting financial inclusion globally and in doing so bolster Creditinfo’s international growth. In his new role, John will also be responsible for delivering the right products and services to Creditinfo’s customers to maximise value, as well as identifying new business opportunities. 

John Cannon, newly appointed Global Chief Commercial Officer at Creditinfo said: “I’m delighted to join Creditinfo, a company that is committed to enriching people’s lives through unlocking access to financial inclusion. This, and its international culture, is what drew me to the company. I look forward to working with the remarkable Creditinfo team to support the next phase of its growth journey.”

Satrajit Saha, Global CEO at Creditinfo said: “With firm roots in the global financial industry and a strong track record as a senior executive leader, John is an excellent addition to our senior leadership team. As we look to expand our global footprint and facilitate access to finance for millions of consumers and businesses worldwide, having John on board is a huge advantage, not only for our own innovation and growth but also for our customers as they turn to us to provide worldclass and transformative solutions and products.”

John will report directly to Satrajit Saha, Creditinfo’s Global CEO.

 

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About Creditinfo

Established in 1997 and headquartered in London, UK, 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 decision analytics solutions.

With more than 30 credit bureaus running today, Creditinfo has the most considerable global presence in this 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 to increase financial inclusion and generate economic growth by allowing credit access for SMEs and individuals.

For more information, please visit www.creditinfo.com

Official visit by the President of Iceland to Creditinfo in Georgia

Guðni Th. Jóhannesson, the President of Iceland, recently completed an official visit to Georgia, where he visited, among other things, the office of Creditinfo in Georgia.

The visit was intended to strengthen the relationship between Iceland and Georgia, among other things through increased cooperation in the field of climate issues and green solutions. The president was accompanied by Guðlaugur Þór Þórðarson, Minister of Environment, Energy and Climate, Nótt Thorberg, director of Grænvang, and a delegation of representatives from the business community, among whom was Hrefna Ösp Sigfinnsdóttir, managing director of Creditinfo in Iceland.

During the visit, Alexander Gomiashvili, Managing Director of Creditinfo in Georgia, welcomed the group and talked about Creditinfo’s activities in Georgia together with Hrefna Ösp, who educated those present about Creditinfo’s activities internationally.

Creditinfo Group has operations in over 30 countries around the world and over 400 employees.

You can read more about the visit of the President of Iceland here.

Guðni Th. Jóhannesson, President of Iceland together with Alexander Gomiashvili, Managing Director of Creditinfo in Georgia 
Alexander Gomiashvili, Managing Director of Creditinfo in Georgia addresses the delegation of the President of Iceland.

For more information, visit www.creditinfo.com

 

ICRA and Creditinfo Tanzania launch first credit rating agency for Tanzania institutions

Dar Es Salaam, 24th January 2024 – Creditinfo Tanzania, provider of credit information and risk management solutions, and ICRA (International Credit Rating Agency) have partnered to launch the ICRA Rating Agency, the first credit rating agency locally based in Tanzania.

The joint venture will provide credit rating and evaluation services to Tanzanian financial institutions, creating for the financial industry. Combined, ICRA and Creditinfo’s Tanzania team bring decades of experience and practical knowledge in credit risk management and analysis to support and improve credit assessment in Tanzania.

Adv Hassan Mansur, Local Director of ICRA Rating Agency Limited said: “We are delighted to launch Tanzania’s first credit rating agency that is fully geared towards strengthening the economy through providing credit rating services that are tailored to the African market. Our partnership with Creditinfo will provide ample opportunities and offer a competitive edge for various institutions, most especially the Tanzanian institutions in the International Market.”

Edwin Urasa, CEO of CreditInfo Tanzania said: “At Creditinfo, we are committed to sustainably growing our business and identifying ideal opportunities to build strong and profitable credit rating agencies, while helping more local citizens and businesses access finance. Our partnership with ICRA marks an important milestone for us and gives us the opportunity to improve the standards of credit assessment. Tanzania is an optimal market for us to introduce this service because of its tremendous promise for inclusive financial services. This venture will set a new standard in credit rating and promote financial health and empowerment across Tanzania.”

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About Creditinfo  

Established in 1997 and headquartered in London, UK, 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 decision analytics solutions.

With more than 30 credit bureaus running today, Creditinfo has the most considerable global presence in this 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 to increase financial inclusion and generate economic growth by allowing credit access for SMEs and individuals.

For more information, please visit tz.creditinfo.com

www.creditinfo.com

 

About ICRA Rating Agency

ICRA Rating Agency Limited has been accredited for being the First Ever Credit Rating Agency approved by Bank of Tanzania (Central Bank of Tanzania) to which we are the only regional central bank approved credit rating agency offering credit rating services. Our organisation also gets the special status of ecai (external credit assessment institution).

ICRA has an expert team with a combined experience of more than 25 years in Audit, Inspection, Financial Analysis, Credit Research, Banking, Compliance, AML and Certification. Our ratings significantly influence corporate and financial institutions to achieve better market standing. ICRA ratings aim to help various corporations and institutions demonstrate their financial capability.

For more information, please visit www.icrallc.com

Nova Credit and Creditinfo Bridge Cross-Border Credit Access for Ukrainians

NEW YORK – January 17, 2024 – Nova Credit, the leading cross-border and alternative credit analytics company, has announced a strategic collaboration with Creditinfo, a global service provider for credit information and risk management solutions, to help Ukrainians gain access to the necessary financial services needed to effectively rebuild their lives abroad. The partnership is powered by Nova Credit’s Credit Passport®, the only cross-border credit solution enabling newcomers to access their foreign credit history when applying for financial products in their new home country.

Bridging this critical data gap, Nova Credit and Creditinfo are providing Ukrainian expats and refugees with the tools they need to get started on the right financial footing upon arrival.Since March 2022, the U.S., U.K., and Canada – Nova Credit’s largest partner markets – have seen a combined 840,000 Ukrainians move*, and that number is expected to grow as the Russia-Ukraine War continues. As many will seek permanent residency in these new countries, a lack of credit history will introduce an obstacle to accessing financial services as, historically, new-to-country individuals have had no way to carry over their credit history and financial identity. This presents a challenge for both new arrivals who are looking to re-establish their lives, in addition to lenders who lack the credit data needed to provide their financial services and products to this newcomer population.

With this partnership, credit data from International Bureau of Credit Histories (IBCH) Ukraine (a Creditinfo credit bureau) – one of the three main credit bureaus in Ukraine – can be instantly translated into a local-equivalent credit report and score so that lenders who use the Credit Passport® solution can assess the credit risk of new-to-country Ukrainian applicants. Nova Credit’s partners using the Credit Passport® today include American Express, HSBC, Scotiabank, and Verizon.

“Of the many credit-excluded migrant populations around the world, few are in more dire need of support than the Ukrainian people,” said Misha Esipov, co-founder and CEO of Nova Credit. “Credit access isn’t just a piece of the puzzle; it’s a lifeline for the countless Ukrainians uprooted by the chaos of war. We set out to build this partnership with Creditinfo and IBCH Ukraine from the onset of the war, and our teams have worked hard to enable this integration. Together, we’re using data to bridge a world where everyone, regardless of where they come from, has a fair shot at building a brighter future.”

“We are delighted to partner with Nova Credit to help Ukrainians arriving in the U.S. gain access to financial services and credit checks as they look to settle and rebuild their lives,” said Satrajit Saha, Global CEO of Creditinfo Group. “Among the many challenges facing Ukrainians, is finding ways to access finance. Having a positive credit history is vital to doing many things in the U.S. such as renting a property and securing a job. This is why the information we can provide through our partnership with Nova Credit is so important – it offers the data financial institutions, employers and landlords need to provide basic services to Ukrainians wanting to rebuild their lives.”

The Credit Passport® Ukraine data integration is available for deployment into any credit risk or underwriting process across the U.S., U.K., Canada, U.A.E, and Singapore. To learn more about how to get started with Credit Passport®, visit: www.novacredit.com/business/credit-passport

*Source: 380,000 into the U.S. according to the U.S. Department of Homeland Security, 250,000 into the U.K. according to UNHCR, and 210,000 into Canada under the CUAET program.

Ends.

ABOUT CREDITINFO

Established in 1997 and headquartered in London, UK, 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 decision analytics solutions.

With more than 30 credit bureaus running today, Creditinfo has the most considerable global presence in this 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 to increase financial inclusion and generate economic growth by allowing credit access for SMEs and individuals.

For more information, please visit www.creditinfo.com

ABOUT NOVA CREDIT

Nova Credit is a credit infrastructure and analytics company that enables businesses to grow responsibly by harnessing consumer credit data. The company leverages its unique set of data sources, bank-grade infrastructure and compliance framework, and proprietary credit expertise to help lenders fill the gaps that exist in traditional credit analytics. Nova Credit serves as the bridge between data and credit excellence, providing a comprehensive suite of solutions designed to give lenders across various industries – including finance, fintech, property management, telecom, and automotive – a competitive edge in the open finance era. Its cross-border credit product, Credit Passport®, cash flow underwriting product, Cash Atlas®, and income verification product, Verification of Income, are used by leading organizations like American Express, Verizon, HSBC, SoFi, Scotiabank, and Yardi. Nova Credit is backed by investors including Canapi Ventures, Kleiner Perkins, General Catalyst, and Index Ventures as well as executives from Goldman Sachs, JP Morgan, and Citi. Learn more at https://www.novacredit.com or reach out to connect@novacredit.com.

An excellent Account Information Service is based on the accuracy of the categorization of transactions

In 2021, Creditinfo Estonia received permission from the Financial Supervision Authority to start offering account information services in Estonia, which later expanded to the markets of Latvia and Lithuania. Today, we have been offering the account information service on the market for almost two years. The account information service is based on the PSD2 directive. We have access to the transaction data of customers of banks and financial institutions using a secure data transmission channel and customer consent.

Account information categorization is the first and most trivial account data processing that creates customer value. In addition to the primary value, categorization is also an input for all subsequent, significantly more value-creating services (for example, debt risk assessment). Without categorization, each time finding, analyzing and displaying value from account information becomes too resource-intensive, so the end user would have to wait a relatively long time to get a result from their data.

Unfortunately, categorization is worthless if the accuracy and quality of the categories are low. Of course, every transaction on a bank account is not an input for assessing a person’s credit risk. When determining credit risk, it is critically important that the accuracy of the categorization of transactions required for analysis is as high as possible. This is to prevent credit losses for companies and overdue debts for private individuals, directly affecting both interest groups’ reputations.

The main input from categorization is related to income

 

The primary input from the account information for credit risk assessment is salary/income and the volume of financial obligations (loans, installment payments, leases, etc.) per month. In addition, various red and green indicators affect a person’s credit risk. For example, casino visits and bailiff payments can be classified under red and insurance charges under green.
To ensure the accuracy of the categorization, Creditinfo has given the first priority to categorizing transactions important for credit risk assessment across the Baltics. However, today, we can state that the overall accuracy of categorizing the account information service offered by Creditinfo across the Baltics exceeds 90%.
 
A more accurate percentage value can only be estimated by looking at the categorization of a specific bank account since the accuracy of the categorization is directly related to the transactions that the bank account reflects.
 
Accurate categorization of account information is also essential for ensuring know-your-customer (KYC) and anti-money laundering (AML) rules for all companies to which KYC and AML rules apply to a greater or lesser extent. For example, too much cash mobility in an account can mean potential money laundering. There is not, and should not be, a definite rule as to what amount constitutes money laundering in the case of a large amount of cash in the account. Many companies operate in a sector where a lot of cash moves. However, this does not make these entrepreneurs suspects of money laundering. If the cash movement is justified, then the doubt is also grounded.
 
In summary, it can be said that the bank statement is a valuable new data collection that helps to assess a person’s credit risk better. The basis for a more accurate evaluation is categorizing bank account transactions of excellent quality. At the same time, it must be remembered that achieving 100% categorization accuracy is impossible. Service providers are constantly changing; people go on trips, new companies are born, older companies disappear, purchases are made in various domestic and foreign online stores, etc. These are all reasons why there are always companies whose payment transaction categories cannot be specified as soon as possible.

Visit creditinfo.ee/en for more information.

Ivo Vallau

Open Banking Product Manager, Ceditinfo Estonia.

Access to customer bank transaction data provides a basis for more intelligent business decisions

In 2021, Creditinfo Estonia received permission from the Financial Supervision Authority to start offering account information services in Estonia, which later expanded to the markets of Latvia and Lithuania. Today, they have been offering the account information service on the market for almost two years. The PSD2 directive regulates the account information service, that grants account information service provider (Creditinfo) access to the transaction data of end-customers of banks and financial institutions, using a secure data transmission channel and customer consent.

Intelligent business decisions can only be made when decision-makers have enough information when making the decision. Decisions made without comprehensive information may remain superficial or rely too much on intuition. A joint decision becomes smart by including relevant, up-to-date, appropriate and verified data for decision-making, analyzing it and drawing conclusions from it.

Companies that want to be competitive in the market and, at the same time, grow faster than the market must act consciously and operatively to take advantage of the exponentially increasing amount of data and to navigate the diverse data landscape. The word “action” means the application of well-thought-out multiple technologies, the careful selection of primary data and adaptation to large, innovative data sets that provide the company with necessary data inquiries and detail-specific analyses. The actions mentioned in the previous sentence are based on the data value chain – a framework for managing data from collection to decision-making.

Access to bank transaction data gives the financial sector and several other sectors an unlimited opportunity to use innovative data sets to improve their business processes. Data (including account data) collection, analysis, targeted use and data-driven decision-making directly relate to Creditinfo’s core business. Creditinfo has invested a lot of time and knowledge to ensure and support its customers in successfully using the account information data. Remember that the customer does not have to invest resources in implementing the necessary specific technologies and data analysis in addition to their core business to filter and acquire value from bank transaction data.

Creditinfo adds value to account data with information from other sources

Bank transaction data helps to make more intelligent and more informed decisions regarding the products, services and conditions offered to the end customer. Figuratively speaking, credit bureau data enlighten one corner of the room of a person’s financial behavior, and the information obtained from account transactions enlightens the other corner of the room of a person’s financial behaviour.

Account information, besides evaluating financial behavior, provides information about a person’s daily habits, experiences, preferences, hobbies and much more.

In summary, access to the data of the end customer’s bank transactions provides a foundation for making business decisions based on an even more extensive and significantly more diverse data set, in other words, making decisions even smarter. As a universal, comprehensive solution provider throughout the Baltics, Creditinfo is the only partner for its customers with access to credit bureau data, global KYC data, and bank account data.

Visit creditinfo.ee/en for more information.

Ivo Vallau

Open Banking Product Manager, Ceditinfo Estonia.

Creditinfo appoints Satrajit Saha as new Global CEO

Former CEO of TransUnion Europe – Satrajit Saha – brings his expertise to Creditinfo, planning to drive growth across its credit bureaus globally.

London – 29th November 2023: Creditinfo, a global service provider for credit information and risk management solutions, has today announced the appointment of Satrajit Saha as its Global Chief Executive Officer (CEO). With over 20 years of experience in banking and credit bureau, Satrajit will drive the growth of Creditinfo and the maturity of its credit bureaus globally. He joins the company from TransUnion Europe, where he held the position of CEO for the last five years.

In his role, Satrajit will lead Creditinfo in advancing its strategic initiatives, with a particular focus on promoting financial inclusion worldwide. Drawing on his rich background in the credit information industry, spread across Asia, Africa, and Europe, he will lead the next phase of Creditinfo’s growth on a global level as it strives to become a truly global bureau and the leader for facilitating access to finance in both developed and emerging markets.

As an experienced strategic leader, Satrajit has an impressive reputation in the financial services space. At TransUnion Europe, he led the board of all TransUnion’s European owned entities. Before joining TransUnion Europe, he was Chief Business Officer at TransUnion India, where he was responsible for crafting and executing TransUnion’s CIBIL’s market strategy. He was also Cards Head, Africa Region, at Barclays Bank.

Satrajit Saha, newly appointed Global CEO at Creditinfo said: “I am honored to take on the role of Global CEO at Creditinfo, a company that is at the forefront of promoting financial inclusion. Together with the talented team at Creditinfo, we will continue to leverage innovative data sets and solutions to bridge information gaps and create opportunities to facilitate access to finance for individuals and businesses globally.”

Monty Ismail, Director at Levine Leichtman Capital Partners and Creditinfo Group Board member said: “We are delighted to welcome Satrajit “Satty” Saha as our new Global Chief Executive Officer. He is an accomplished executive with successful leadership experience relevant to our business, including his time as CEO of TransUnion UK. Today marks the beginning of a new chapter for Creditinfo, and we are excited to see Satty, with extensive knowledge of our key markets, take over as CEO. We are looking forward to working with Satty in continuing to expand our global footprint and unlock access to finance for millions of consumers and businesses worldwide. On behalf of the Board of Directors, I would like to thank Paul Randall for his important contribution as CEO. He has been key to our success, and we are all grateful for his leadership and dedication.”

He will begin his new role as Creditinfo CEO on 1st January 2024 and will report directly to the Creditinfo Group Board.

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About Creditinfo

Established in 1997 and headquartered in London, UK, 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 decision analytics solutions.

With more than 30 credit bureaus running today, Creditinfo has the most considerable global presence in this 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 to increase financial inclusion and generate economic growth by allowing credit access for SMEs and individuals.

For more information, please visit www.creditinfo.com

A Master’s Thesis that highlighted the importance of timely submission of the Annual Report

In May 2023, Creditinfo Eesti announced a prize fund to recognize students who have addressed research questions in the fields of money laundering and sanctions in their research. In cooperation with the COBALT law firm and the representatives of the State Money Laundering Bureau, the evaluation committee chose Victoria Helenurme, a master’s student from the University of Tartu, as the winner for her master’s thesis on the topic “Prediction of deletion from the business register due to non-submission of the annual financial report using the example of Estonian companies”.

Victoria Helenurm is from Tallinn and graduated cum laude from the University of Tartu, majoring in Marketing & Financial Management. Today, she works as a financial controller in a company offering energy-saving indoor climate and renewable energy solutions and sees her future in business.

We had an interview with her on the journey of her thesis topic:

 The topic of your thesis was “Prediction of deletion from the business register due to non-submission of the annual financial report using the example of Estonian companies” – how did you arrive at this topic?

At the beginning of the summer of 2022, discussions began with people who eventually became my thesis supervisors. My main desire was to write a paper on a current topic in society. This year, the Estonian state penalties for not submitting the annual report became harsher, and in cooperation with my supervisors, we saw that there is a public interest in this area of research and also sufficient data for research.

 Why was this topic worth researching?

 If, as a person, we take a loan, for example, we are understanding the obligations that come with taking a loan. For me, founding a company or being on its board is a somewhat similar responsibility – as a manager, we have assumed the responsibility, among other things, to report on the progress of our company’s business to the public.

Unfortunately, while we are mostly exemplary in servicing loans, tens of thousands of Estonian companies fail to submit their annual reports on time.

 I cannot say whether this difference is due to, among other things, the fact that the penalties for not submitting the annual report have been relatively lenient. But it is certainly worthwhile for us to become more aware that such behavior is problematic.

After all the state of our countries businesses is based largely according to the data of the Business Register. If we have thousands of active companies that do not fulfill their reporting obligations, the financial forecasts, risk analyses, business decisions, etc. of the state, lenders and other parties will suffer in its quality.

The submission deadline (6 months after the end of the financial year) is a very lenient deadline. The business landscape is more and more unpredictable, so the knowledge of the previous year’s business results that arrives half a year later is already outdated. As is typical of our e-government, we would expect that at least certain types of companies could be assigned a much earlier submission obligation to help update our economic data.

 What facts became clearer as part of the research?

In my research, I tried to find an answer to the question of whether the deregistration of a company can be predicted purely by looking at how the company’s management has cared about the obligation to submit an annual report in its previous business life.

The Estonian financial world is very much a believer in financial ratios when assessing the business health of a company. I tried to see if it is possible to convincingly assess the business risk of deleting the company by completely setting aside the financial statement.

The studied dataset also proved this – a significantly more accurate forecasting method than financial ratios (prediction accuracy approx. 63%) was the observation of the past behavior of board members (prediction accuracy almost 82%). It can be said that if there is a member of the board of the company who has either delayed or failed to submit the financial year report in previous companies, it is a very clear business risk, which indicates the risk of deletion of the company in question.

 How could this research topic be continued?

Although I myself rather do not plan to continue my studies in a doctoral program, I definitely see possibilities for expanding this research topic. The obtained research results could certainly be compared with our neighboring countries – to assess whether in Latvia, Lithuania, Finland, etc. there are similar relationships between corporate delisting and board members’ past due diligence.

Another immediate opportunity for investigation is provided by the amendments to the law that entered into force this year, which toughened the penalties for failure to submit an annual report, among other things. Repeating this research in 5+ years would give an idea of whether business behavior has improved in terms of reporting obligations.

We were very pleased with Victoria’s research, as her research clearly connected with the general theme of our competition – the data of the Business Register and national registers in general are the main factors when applying the KYC principle. Financial data from the company that is not submitted on time or is completely missing, is a clear danger signal when investigating the background of your business partner.

When it comes to risk management – both when creating a customer relationship and during the existence of a customer relationship, up-to-date data from the business register is very necessary. Does the company actually operate; whether the data there (especially the field of activity and financial data) are correct (especially when it comes to the application of enhanced due diligence measures). The given data helps to understand the customer’s activity profile.

If the client does not submit annual reports, it is clear that it may be a riskier client, and this should be taken into account when establishing or monitoring a business relationship in order to mitigate the risk.

Urmas Pai –  KYC&Fraud Global Product Manager, Head of the evaluation committee

Creditinfo Estonia

www.creditinfo.ee

Creditinfo’s Account Information Service Product

In the spring of 2021, the Estonian Financial Supervision Authority authorized Creditinfo Estonia to offer Account Information Service in the Estonian market. In the autumn of 2021, the Estonian Financial Supervision Authority also granted the authorization to provide Account Information Service to the Latvian and Lithuanian markets. This act added to our product portfolio a new, exciting product that benefits our customers in the short and long run. As of today, we have had the Account Information Service in our cross-Baltic product portfolio for two years.

About the Account Information Service

The opportunity to provide Account Information Service emerged when the European Union (EU) Parliament and the EU Council adopted a new directive regulating payment services in the EU internal market on November 25, 2015 (PSD2), which emphasized the expansion of open banking in Europe.

Open Banking refers to provide third-party financial service providers open access to transactional data of bank and financial institution customers, using secure data transmission channels and customer consent.

The Account Information Service is a part of the Open Banking initiative, defined as an online service where the service user (customer) is identified and authenticated via strong identification and authentification means. The service itself means transmitting customer’s bank account data through a secure channel to third party from whom the customer wishes to apply a credit product.

How does Creditinfo provide the Account Information Service?

Using Creditinfo Estonia’s solution, both individuals, which is regulated by the aforementioned payment service directive, and companies can transmit their account information to third parties.

Beside financial sector the possibilities of the Account Information Service can be successfully used in application processes in various sectors. Previously mentioned customer consent is obviously obligatory.

Different sectors that can benefit from account information:

  • Public sector companies that provide subsidies to individuals and businesses, where the information in the account details creates significant value when determining subsidies;
  • Insurance sector companies, which can use behavioral information from the bank account for determining insurance premiums or simplifying the insurance incident evidence burden;
  • Other sectors where value from account information help to create better personalized offers for their products and services.

The strength of our Account Information Service is categorization.

The greatest value of the Account Information Service provided by Creditinfo Estonia comes from categorizing account transactions, which our clients (data recipients) can conveniently use in their business decisions.

Categorization is a solution that can and should be continuously improved over time. Precise and detailed categorization is a top priority for Creditinfo Estonia’s Account Information Service.

The data from the Account Information Service serves also as an input for our Account Information Service Report. The report helps to make more informed business decisions both internally and towards our client’s customers. The report highlights all the key ratios, indicators, “green and red flags” and much more that can be extracted from account information.

The report is designed in a way that can be customized to meet the client’s needs, which make it a tool for everyday business decisions.

More information about the service: https://creditinfo.ee/en/avoid-debts/psd2/