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1 Challenges For A Credit Bureau In Emerging Markets.

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Presentation on theme: "1 Challenges For A Credit Bureau In Emerging Markets."— Presentation transcript:

1 1 Challenges For A Credit Bureau In Emerging Markets

2 November 23 rd, 2004 Slide 2 Expert Credit Bureau Overview Expert Credit Bureau is a private initiative under Experian partnership and support;  Experian is a 1.7 Billion Euro turnover division of the 11 Billion Euro GUS group. Experian has operations in more than 60 countries, with 13,000 employees, and more than 40,000 clients in the information solutions business.  Experian manages large databases that enable credit granting and monitoring, helping minimize fraud and credit risk, processing an average of 1.4 million consumer transactions each day on behalf of clients Advantage of Experian world-wide experience in operating private bureaus not owned by the banks is combined with local experience in IT/Telecom and financial banking area; Experian international “best-practice” are adapted to Romanian market particularities;

3 November 23 rd, 2004 Slide 3 ExCB: What Are We ? ExCB is: Independent Multi-industry Banking Sector Consumer Finance Companies Telecoms Utilities User-driven ( managed through a User Group)

4 November 23 rd, 2004 Slide 4 Credit Reference Agency Challenges Evolving, disparate data sources Rising fraud Increasing demand for powerful scoring Increasing remote transactions Changing legislation A requirement to provide faster, better value

5 November 23 rd, 2004 Slide 5 Credit Bureau Critical Success Factors Integrity And Trust Integrity And Trust Security And Availability (Real-Time Access) Security And Availability (Real-Time Access) Multi-industry Data Sourcing Multi-industry Data Sourcing Value Added Services Value Added Services Long-term Commitment Long-term Commitment Time To Market Time To Market

6 November 23 rd, 2004 Slide 6 Ensuring Integrity and Trust Guarantee confidentiality and integrity of data Provide strict data access control Promote fair sharing of data - PRINCIPLES Adhere to local legislation Manage information but not alter subscribers’ data

7 November 23 rd, 2004 Slide 7 Expert Credit Bureau Principles #1 GOVERNING PRINCIPLE 1. Data is shared only for the prevention of over-commitment, bad debt, fraud and money laundering, and to support debt recovery and debtor tracing with the aim of promoting responsible lending. GENERAL PRINCIPLES OF CREDIT PERFORMANCE DATA SHARING 2. Data provided for sharing purposes must meet legal, regulatory and voluntary codes of practice requirements before provision and in use. Subscribers must only use data for purposes for which the required form of consent has been given by the individual or is approved by regulatory authorities. Data will be shared on the principle that subscribers receive the same credit performance level data that they contribute and should contribute all such data available. 3. Data will be shared on the principle that subscribers receive the same credit performance level data that they contribute and should contribute all such data available. 4. Data may be used or made available by ExCB only in ways permitted by these Principles.

8 November 23 rd, 2004 Slide 8 Credit Bureau Principles #2 USES OF SHARED DATA 5. Subscribers must never use shared data to target any customers of other specific subscribers. 6. Shared data must not be used for targeting of new prospects. ADHERENCE TO THE PRINCIPLES 7. Subscribers have responsibility for regular monitoring to ensure compliance with the Principles and the quality, completeness and accuracy of data supplied. Active steps must be taken to address any shortcomings. ORGANIZATION PRINCIPLES One vote principle: each user has the right for one vote; 8. One vote principle: each user has the right for one vote; once a user takes the decision to leave the bureau, all the account information provided to the bureau will be deleted. 9. Subscriber de-rollment : once a user takes the decision to leave the bureau, all the account information provided to the bureau will be deleted.

9 November 23 rd, 2004 Slide 9 The Necessary Approach Leverage technology to bring together many sources of data to complete the picture Make the system easy to connect to and access  Communication Infrastructure Success requires long-term commitment

10 November 23 rd, 2004 Slide 10 Affiliate Location Ethernet / E1 connectivity Protection via back-up FO connection Ethernet over SDH Metropolitan Network ExCB Operation Center ExCB Back-Up Operation Center Network Management Center VLAN 802.1q ExCB Infrastructure offers: high reliability centralized management scaleable capacity high security level protection mechanisms ExCBCommunicationsInfrastructure Leverage technology to bring together many sources to complete the credit picture

11 November 23 rd, 2004 Slide 11 Roadmap for Value Added Services Long term strategy on Credit Bureau Value Added Products implementation, based on EXPERIAN expertise:  Credit Bureau Scores  Monitoring Services  Application Processing System  Anti-Fraud Services

12 November 23 rd, 2004 Slide 12 Development Phases Mature Credit Bureau TODAY: Black list information access (BAD/GOOD answers) Phase 1: Detailed personal and black list information access (delayed 30-59; 60-89,90+, fraudulent, etc) Phase 2: Additional Positive Information Phase 3: VAS (Credit Score, alarms, etc) 2004 2005 2005 -

13 November 23 rd, 2004 Slide 13 Local Expertise Fiber optics interconnection including the high- speed transmission equipment Expertise in Credit Management Software applications Data centers Scoring

14 November 23 rd, 2004 Slide 14 Current Status There are over 1,500 locations in Romania from where more than 3,000 credit analysts access our application via secure Internet protocol for scoring and black-list customer verification; As a consequence, more than 20,000 inquiries are made DAILY toward ExCB; Currently hosting the Romanian Leasing Companies Association’s black-list; NO UPFRONT investment; REAL-TIME automated services availability

15 November 23 rd, 2004 Slide 15 BANK 1 BANK 2 BANK N INTER- NET S1 SNSN SNSN SNSN INTER- NET PSDSBS black-list score-card PSDSBS black-list score-card PSDSBS black-list score-card ExCB REAL-TIME Services Availability Throughout Entire Credit Management Retail System

16 November 23 rd, 2004 Slide 16 Thank You !


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