CM MARCH 2022

CREDIT REFERENCE AGENCIES
AUTHOR – Sean Feast FCICM
heightened perceived value for good quality
data: “Companies are having to rely on data
more than ever,” he says, “whether this be for
collections, marketing, setting terms or KYC,
and I can only see this need increasing as
insolvencies are predicted to surge, inflation
hits a new 30-year record, Government support
and tax relief is reduced, and more fallout
from the pandemic is brought to the surface.”
Jo Kettner agrees: “Increased uncertainty
is a real problem for broad-based economic
growth,” she explains. “The Government
COVID support schemes provided muchneeded
help and undoubtedly prevented
many businesses from failing. However, as
those schemes have ended and the reality of
pay-back starts to bite we are expecting levels
of insolvency to exceed pre-pandemic levels.”
In response to this, Company Watch
launched a COVID Scenario Forecast in April
2020 to help users understand the potential
impact COVID would have on businesses:
“We modelled impact scenarios by industry
and allowed our users to interact with these
scenarios to tailor for individual companies,”
she continues. “As information on the
Furlough and CBILS schemes were released we
incorporated this information into our reports
and undertook an extensive matching exercise
to link information to different levels of the
Group, to help our users have a 360-degree
understanding of risk.”
Tim Vine highlights a positive impact of
the pandemic has been an acceleration in
innovation. Digitisation and automation, he
says, have been supercharged: “In the finance
solutions space, the main change continues
to be having the right technologies in place
to alleviate pressures on already stretched
finance departments,” he explains.
“Mundane and manual tasks that would
typically take hours to complete – and often
using pen and paper – can now be automated,
giving finance departments time back to do
revenue generating work instead. While this
might sound a little archaic, it’s still very
much the case that the process a company
goes through to apply for credit is form-based
and offline. As is the process of a business
self-assessing. Moreover, it is important to
remember that many companies were not set
up for a digital, remote-working environment
and have struggled as a result. Offshore shared
service centres may have been closed for long
periods, requiring employees to work from
home. But without high-speed broadband
(or even without internet completely in less
established markets), this has impacted credit,
finance and other functions.”
GOVERNMENT PROTECTION
Tim believes that businesses have been
partially protected from financial stress and
potential closures by Government support
schemes and delays or pausing in court
hearings for County Court Judgments and
other failure lead-up events: “As a result, the
ability to distinguish between financiallysound
and financially-stressed companies
has become much harder, which in turn has
created uncertainty for credit and finance
functions reviewing credit policies and setting
credit terms for customers.”
So how has Dun & Bradstreet responded?
Like Company Watch, it focused on scenario
planning: “Prior to the pandemic, almost all of
our products and services at Dun & Bradstreet
were available online and increasingly via
integrated connections into our customers
finance and credit management systems,
ensuring continued access to the data and
systems that help businesses make their
decisions. To help guide companies through
the uncertainty of the pandemic, we created
the COVID Impact Index, complementing
existing credit ratings and analytics by
assessing the expected impact of the pandemic
alongside traditional credit risk assessment.”
CoCredo has similarly taken advantage of
the pandemic by investing significantly into
online training with customers and prospects:
“This has been a big learning curve for us as a
business but very beneficial to all parties and a
positive step forward,” Dan Hancock explains.
“Due to our technical support and the
ability to integrate with our APIs, we’ve seen
more than ever that customers and prospects
are looking at automation. For that reason
we have invested in our infrastructure to
continue to provide the very best customer
service and technical support. We have added
the ability for customers to customise their
own scorecards within their reports or API
feeds, which is proving to be very popular
over the last year. This creates a decisionmaking
matrix that is easy and reliable and
can be tailored for each client. We hope that
as more companies look to increase sales,
more credit applications will be requested
and the automation of data to make informed
decisions will prove crucial.”
ECONOMIC RECOVERY
So how can CRAs and Business Information
providers support the economic recovery
as an industry, and through their individual
services? Jo Kettner says that the key is in
helping businesses understand and stress
test risks they are taking: “Transparency
and ‘explainabilty’ are two of the founding
principles of Company Watch, so enabling
our users to understand the reasons behind
our score as well as to interact to scenario test
what might happen in periods of uncertainty
help our users make evidence-based risk
decisions,” she explains. “Recent product
launches such as Aphrodite® – our enhanced
director matching functionality helps users
spot potential phoenix companies by surfacing
the history of failed companies which are
often not linked by Companies House. There’s
no doubt that doing business will become
Brave | Curious | Resilient / www.cicm.com / March 2022 / PAGE 14