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Challenges For A Challenges For A Credit BureauCredit BureauIn Emerging MarketsIn Emerging Markets

November 23rd, 2004 Slide 2

Expert Credit Bureau OverviewExpert 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;

November 23rd, 2004 Slide 3

ExCB: What Are We ?ExCB: What Are We ?

ExCB is:• Independent• Multi-industry

• Banking Sector• Consumer Finance Companies• Telecoms• Utilities

• User-driven (managed through a User Group)

November 23rd, 2004 Slide 4

Credit Reference Agency ChallengesCredit 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

November 23rd, 2004 Slide 5

Credit Bureau Critical Success FactorsCredit Bureau Critical Success Factors

Integrity And TrustIntegrity And Trust

Security And Availability (Real-Time Access)Security And Availability (Real-Time Access)

Multi-industry Data SourcingMulti-industry Data Sourcing

Value Added ServicesValue Added Services

Long-term CommitmentLong-term Commitment

Time To MarketTime To Market

November 23rd, 2004 Slide 6

Ensuring Integrity and TrustEnsuring 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

November 23rd, 2004 Slide 7

Expert Credit Bureau Principles #1Expert Credit Bureau Principles #1

GOVERNING PRINCIPLE1. 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 SHARING2. 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.3. Data will be shared on the principle that subscribers receive the same Data will be shared on the principle that subscribers receive the same credit performance level data that they contribute and should contribute all credit performance level data that they contribute and should contribute all such data available.such data available.4. Data may be used or made available by ExCB only in ways permitted by these Principles.

November 23rd, 2004 Slide 8

Credit Bureau Principles #2Credit Bureau Principles #2

USES OF SHARED DATA5. 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 PRINCIPLES7. 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 PRINCIPLES8. One vote principle: each user has the right for one vote;One vote principle: each user has the right for one vote;9. Subscriber de-rollment : once a user takes the decision to leave the once a user takes the decision to leave the bureau, all the account information provided to the bureau will be deleted.bureau, all the account information provided to the bureau will be deleted.

November 23rd, 2004 Slide 9

The Necessary ApproachThe 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

November 23rd, 2004 Slide 10

Affiliate Location

Ethernet / E1Ethernet / E1connectivityconnectivity

Protection via back-upProtection via back-upFO connectionFO connection

Ethernet over SDHEthernet over SDHMetropolitan NetworkMetropolitan Network

ExCB ExCB Operation CenterOperation Center

ExCB ExCB Back-Up Operation CenterBack-Up Operation Center

Network Management CenterNetwork Management Center

VLAN 802.1qVLAN 802.1q

ExCB Infrastructure offers:ExCB Infrastructure offers:• high reliability• centralized management• scaleable capacity• high security level• protection mechanisms

ExCB ExCB Communications Communications InfrastructureInfrastructure

Leverage technology to bring together many sources to complete the credit picture

November 23rd, 2004 Slide 11

Roadmap for Value Added ServicesRoadmap for Value Added Services

Long term strategy on Credit Bureau Value Added Products implementation, based on EXPERIAN expertise:

Credit Bureau ScoresMonitoring ServicesApplication Processing SystemAnti-Fraud Services

November 23rd, 2004 Slide 12

Development PhasesDevelopment 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 -

November 23rd, 2004 Slide 13

Local ExpertiseLocal Expertise

Fiber optics interconnection including the high-

speed transmission equipment

Expertise in Credit Management Software

applications

Data centers

Scoring

November 23rd, 2004 Slide 14

Current StatusCurrent 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

November 23rd, 2004 Slide 15

BANK 1

BANK 2

BANK N

INTER-NET

S1

SN

S1

SN

S1

SN

INTER-NET

INTER-NET

PS DS BS

black-list

score-card

PS DS BS

black-list

score-card

PS DS BS

black-list

score-card

ExC

B

REAL-TIMEREAL-TIME Services Availability Throughout Services Availability Throughout Entire Credit Management Retail SystemEntire Credit Management Retail System

November 23rd, 2004 Slide 16

Thank You !Thank You !