January and February 2016 Credit Management

OPINION
THE BUSINESS
OF INFORMATION
In Part One of a two-part feature, Sean Feast looks at the key challenges
facing business information providers, and how they are meeting the needs
of credit managers going forward.
THE business information industry has undergone
radical change in recent years as businesses,
and indeed consumers, understand more about
the importance of the world of credit and the
impact of a credit ‘score’. They have certainly become
more transparent, learning perhaps the lessons of their
counterparts in the credit insurance sector, some of who
still bear the scars of their stubborn refusal, before it
was too late, to speak more openly about their decisionmaking
processes.
But the business information providers – companies
such as Dun & Bradstreet, Equifax, CreditSafe, Graydon,
Experian and Jordans – face a difficult future as the
well-intentioned meddling of bureaucrats looks set to
add further complexity and difficulty to an industry that is
already complicated enough. And the challenges come
from beyond these shores.
OBTUSE ACTIONS
Perhaps the greatest challenge, or at least the one that is
most pressing, comes from our friends in the European
Union and the specific issue of the proposed EU Data
Protection Regulation. Twelve months ago, it had looked
as though common sense would prevail, but that was to
misjudge the seemingly obtuse actions of a handful of the
industry’s greatest protagonists led by the protagonist-inchief,
Jan Albrecht.
"What the industry has
to do is work with the
authorities over the two
years that we have to adopt
the new regulations and
agree how those regulations
are to be interpreted".
NEIL MUNROE
MANAGING DIRECTOR OF CRA INSIGHTS
Issues such as the right to be forgotten, and the ability
for individuals to effectively re-write their credit histories
have not yet, it seems, been kicked into the long grass.
Absurd though it may seem, this ludicrous proposal is still
on the table for debate; so too the right for individuals to
demand that their ‘score’ is subject to manual overview,
and not dependent on technology alone. In theory this
would oblige every information provider to change their
current business model.
Not surprisingly, this issue is one that probably
excites the industry the most. Neil Munroe, Managing
Director of CRA Insights and President of the Association
of Consumer Credit Information Suppliers as well
as a member of the Regulatory Committee of BIIA,
understands how the EU has arrived in its current
position, and doubts it is where it intended to be: “It is
easy to see how parts of the proposed regulation relate to
the use of information on the internet by companies like
Google and Facebook,” he says, “but I doubt it was ever
intended to apply to the credit reference agencies and
business information providers, and I hope there will be
an understanding that it does not apply to the business
information world.”
Max Firth, Managing Director for Experian Business
Information Services, doubts it too: “The conversations
we’ve had have been positive and it’s clear the importance
of credit reference agencies is widely understood,” he
says.
Neil Munroe says that the problem is that the regulation
is so high level – relating to anyone who holds data –
that it will always be subject to interpretation: “What the
industry has to do is work with the authorities over the
two years that we have to adopt the new regulations and
agree how those regulations are to be interpreted.”
At a practical level, that means working with the
Article 29 Working Party comprising all of the European
information commissioners: “Their guidelines must fit with
our understanding of the regulation,” Neil adds. “It will be
a tough piece of work.”
MEMBERS’ VIEWS
Mark Preston of Dun & Bradstreet agrees, and says
that the various representative bodies – the Business
Information Industry Association (BIIA), the Federation
of Business Information Service (FEBIS), the Business
Information Providers Association (BIPA) – are working
hard to fully assess the impact to the industry but it’s not
easy.
18 Jan/Feb 2016 www.cicm.com
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