Posted on May 7, 2024 by phidi

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

 

Posted on January 9, 2024 by phidi

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.

Posted on December 13, 2023 by phidi

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.

Posted on October 18, 2023 by phidi

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/