Credit Post-Covid
Historically, every time that there was a crisis, lessons were learnt. The Authorities, be they political or financial, rushed in to introduce and implement corrective regulations and legislation to either block legislative loop-holes or correct oversights that permitted players in their respective fields, but especially in the financial sector, to take advantage of same for their own individual benefit with little regard for the rest.
The lessons and improvements implemented by regulators and financial institutions since the from the last financial have stood the banks and financial services in stronger position when facing the financial crisis which is following the health crisis. Banks are reacting by using data insights through monitoring and early warning solutions to address problem debts before they escalate.
A few years later, with the introduction of strict regulatory measures, the requisite confidence and stability in financial markets was gradually established. Central banks are now closely monitoring these, issuing directives on a regular basis to further stabilize and impose tighter controls to prevent a repeat. Regulating banks is difficult, unfortunately, and there is always the risk that a similar crisis raises its head again.
This is a very simplistic reference to the Financial Crisis of 2007-2009, which forced changes and tighter controls on the global financial markets.
Changing the scenario to the present day, COVID-19 pandemic, although different, in that it is more of a medical beast, has impacted the global population and, as a result, the global economy has turned out to be messier than the Financial Crisis of 2007-09. Individuals who own and control both global economic and non-economic practices are the victims this time. Through its secondary effects, the pandemic, may also be considered as a financial crisis. The policies put in place to control and ultimately curtail the pandemic, have so far had limited success in curbing the spread, but they did manage to create havoc with the global economies. Some industries, such as food distribution, benefited from rising demand, while others, such as telecommunications and pharmaceuticals, were unaffected and continued their operations, although maybe at a slower pace but certain sectors took a heavy beating.
The airline, travel, hospitality, leisure, and entertainment sectors have been hit the hardest with dramatic reduction in activity and with closures being the norm.
The airline industry, on its own, according to a KMPG report, estimate a revenue loss worth USD200 billion in 2020 and to prevent a total collapse, government assistance, worth USD200 billion is being considered.
However, the airline industry is just the beginning. One has also to consider other businesses that are directly and indirectly linked. Millions of individuals are affected – loss of jobs or reduced hours of work translate into less consumer spending, higher risks, defaults and similar. At this point, the Great Depression comes to mind, but the true impact of the pandemic will be gauged towards the end of 2021 and throughout 2022.
In these turbulent times, with losses expecting to continue until 2022 and possible, even beyond, risk management is crucial and extremely critical for all industry players. Despite, corporate bankruptcies still being rather low, further pandemic waves with the relative lockdown and restrictive policies would deplete remaining cash reserves and eventually increase bankruptcies.
The new normal will set in at different speeds as lockdowns are lifted, but this will also depend on the recession in each country and on the effect of restrictions on demand and supply. Recoveries may vary by sectors, but severe economic necessities may induce Governments to loosen their restrictive policies in an effort to kick-start certain activities, in particular, the airline industry and travel, which indirectly would also re-activate the hospitality, leisure and entertainment sectors.
It is now more critical than ever that financial institutions and other market participants, recognize the value of using tools like a Credit Bureau. These credit bureaux deliver insights in the data such as credit scoring and financial transparency, that can identify riskier projects/individuals/businesses, and thus prevent defaults to the benefit of the lender and national stability, in general.
Now is the time to gain a better understanding of our local marketplace, and the speed in which information changes. We have to comprehend how our local marketplace will perform in the post COVID era. It is better to be informed than to continue blindly as the future is changing and businesses and individuals must adjust and act accordingly.
In the immediate future, credit risk assessments, will be based on real-time monitoring of sectoral and sub-sectoral situations, making historical data in previous known environments less important – COVID has taught us a tough lesson
Remy Damato,
Credit Reporting Manager, Creditinfo Malta.
Creditinfo Group Awarded World Bank Tender
São Tomé and Príncipe, São Tomé, 19th, April 2021 – Creditinfo Group, the leading global credit information and decision analytics provider, today announces that it was awarded a tender by the Central Bank of São Tomé – represented by AFAP (Agencia Fiduciaria de Administracao de Projectos) who will be handling a project on the delivery and support of Public Credit Registry, financed by the World Bank.
Sao Tome is working with the World Bank with the aim of improving the financial infrastructure in the market, increase access to finance and enhance market stability. Creditinfo has already supported many markets in achieving this goal and was identified as a trusted and reliable partner.
Creditinfo will provide CBS (Credit Bureau Solutions), including Value-Added Products such as the Statistical Score, MyCreditinfo, Benchmarking and Monitoring – the latest and modern cutting-edge products and services in the credit industry, to help the Central Bank of São Tomé in implementing the Public Credit Registry.
Samúel Ásgeir White, Director of Direct Markets, Creditinfo Group is excited about this opportunity. “The important part is the knowledge transfer and our active approach – direct help to the Central Bank of São Tomé, with the whole implementation process of our modern services in São Tomé and Príncipe, since we have years of experience from the Central Banks around the world that we provide the same products and services to,” he said.
The competition was organized by AFAP as a fiduciary agency responsible for the management of the World Bank’s financial support, in favor of the Central Bank of São Tomé and Príncipe as a borrower, with Creditinfo being elected as winner, among 4 bidders.
On behalf of AFAP, Carlos Bonfim, technical advisor, intervened to congratulate on the conclusion of the contract with Creditinfo, a company whose references allow the prospect of a satisfactory result regarding the updating of the credit risk center of the Central Bank of São Tomé and Príncipe. He ended by expressing the wish that the quality of the partnership between all stakeholders will continue, in order to create a favorable cooperation climate for the implementation of the project.
-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 AFAP
AFAP was created in 2004 with the aim of managing funds made available by the technical and financial partners of the Government of São Tomé and Príncipe, of which the World Bank stands out in particular. It has an effective and motivated team and is respectful of the best practices for regulating tenders, and today has a portfolio of projects and partners in constant growth. Within the framework of its performance, the main projects such as the installation of fiber optics in Sao Tome Principe to provide high-speed internet services, education and health for all, improvement of the energy system can be cited as an example of success. electricity, namely hydrocentrals, introduction of alternative energies as well as rehabilitation of main roads, etc.
For more information, the following AFAP website can be viewed: www.afap.st
Better information for customer due diligence in Iceland
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.
Beneficial Owners
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.
Monitoring
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.
This article was originally posted in Icelandic on the Creditinfo Iceland blog.
Icelandic Media in 2020 – Creditinfo Iceland
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.
This article was originally posted in Icelandic on the Creditinfo Iceland blog.
The way leading to the ‘haven’ of Startups is grounded by Data Analysis
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.
Interview with Catherine Muraga, CIO – Stanbic Bank Kenya
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.
Creditinfo’s commitment to Data Quality
Data is the new oil, but quality is paramount
In 2017, The Economist ran a cover story portraying data as the new oil, (certainly not last week’s oil), calling it “the world’s most valuable resource”. Data is pervasive and is collected regarding virtually everything that happens. Essentially it comes down to one simple cycle, as described in that 2017 issue: “By collecting more data, a firm has more scope to improve its products, which attracts more users, generating even more data, and so on…” Information is power (for credit bureaus, the power to enhance market lending effectiveness). But there is a catch; because not any kind of data will suffice. In the world of credit, for it to be valuable, data must be complete, high quality, regularly transmitted and verifiable. High-quality data has a deeper, more transformative power. In this industry, data quality and completeness are critical for the successful impact of credit bureaus, and Creditinfo has, since its founding, had a clear focus on this area to support banks, MFIs and other institutions for constant improvement.
In Morocco, Financial Inclusion seen as key to Development
Last October, King Mohammed VI of Morocco made a speech to mark the beginning of the new session of Parliament. In the yearly address which traditionally signals the general policy direction for the next 12 months, he called on banks and financial institutions to play “a greater role” in the country’s development. He specifically referred to “simplifying and facilitating access to loans…. and financing the creation of small and medium sized enterprises.”
Trusting Creditinfo Bureau Score in a Crisis
The quality of predictive algorithms plays a crucial role in Creditinfo operations. We strive to help our Clients perform efficient credit decisions through smart and innovative use of data.
The financial inclusion conundrum in developed economies
By Stefano Stoppani – CEO, Creditinfo Group
Last month, consumer champions Which? revealed the findings of research into the state of the UK banking sector – with a somewhat bleak conclusion. The top line of the study? A third of all UK bank and building society branches have closed over the last four and half years. Of those that remain on our high streets, opening times have narrowed.
