april i - 2016 issue - biia.com · april i - 2016 issue pages 2 - 3 pages 4 - 8 page 9 page 10 ......

BIIA NEWSLETTER ISSUE 04 I - 2016

Copyright © BIIA 2016 - For Member Internal Use Only – To Request Permission to Publish Contact: [email protected] The content of this newsletter does not necessarily reflect the opinion of BIIA and its members. BIIA is not responsible for the use which might be made of the information contained in this Newsletter. Nothing in this Newsletter implies or expresses a warranty of

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April I - 2016 ISSUE

Pages 2 - 3

Pages 4 - 8

Page 9

0

Pages 11 - 14

Late Breaking News:

BIIA Achieves a new Milestone: 7,000 Posts (News Items) on:

www.biia.com and creates Fast Track to its Content

Partnerships: Analytics, Decision Software and Platforms Lead the Pack

BIIA Member CTOS Malaysia Launches CTOS Score – BIIA Director

Lawrence Yee Participated in the Panel Discussion on the Role of Credit

Reporting in the Financial System

Member News:

HG Data Disrupts Vertical Sales and Marketing Status Quo

Cerved Information Solutions Revenue Up by 6.7% in 2015

Bisnode Southern Markets Win the Special Golden Practice Award

Creditsafe Expands its Instant Global Reach

Financial Services Firms Are Defining Conduct Risk – But a Long Way

to Go …

CRIF Signs Service Agreement with 6 Major Banks in Jordan

CRIF Joins the European AVM Alliance (EAA)

Veda Celebrates two Years of Comprehensive Credit Reporting

CIBI Information, Inc. is now a Special Accessing Entity of CIC

Industry News:

Dutch Central Bank to Create Prototype Bockchain-Based Currency

Credit Insurance: Global Trade Continues to Grow, but Risks Increase

News from China:

China Internet Finance Association Launched

HC International 2015 Revenues Down 5.2%

Regulatory News:

The European Central Bank (ECB) and its Work on Anacredit – A

potential Game Changer for the Credit Bureau Industry

BIIA Welcomes two new Members:

Al- Nabaa Commercial Services Co. W.L.L. (NCS Collections), Manama,

Kingdom of Bahrain

Infocredit Group, Nicosia, Cyprus

mailto:[email protected]

http://www.biia.com/




2

LATE BREAKING NEWS

BIIA Achieves a new Milestone: 7,000 Posts on www.biia.com

During the month of March the total amount of news items posted

on www.biia.com reached 7,000. This extensive coverage of industry

news required us to move the BIIA database to a dedicated server.

Your editor receives quite a number of requests concerning particular

topics such as regulatory changes, acquisitions, product introductions,

partnerships and general trends in our industry. This, however, is not as

easy as it sounds because members are not always specific what they

are looking for.

To help our members to find particular documents we introduced a

number of features which are helpful in getting to a topic in question: The Fast Track to finding documents is the

Search Box (item 1 in the illustration below). Just type in a company name, a country or a statement such as

“Facilitating SME Financing Through Improved Credit Reporting” and you arrive quickly at the desired topic.

Seeking efficient access to questions of who bought whom (acquisition), who introduced new products (product

development), partnerships, international expansion and people on the move (events), we developed a ‘BIIA

Expanded Search’ (2). This will provide you with a listing of such events within a given timeframe.

On the Regulatory side (3) of our

business a lot is happening. With 1 out of

5 regulatory changes on privacy from

OECD countries and the EU being

adopted by Asian countries we have

instituted a European Regulatory alert.

Note: the adoption of privacy legislation

comes from Europe rather from the

Americas.

The BIIA database (4): Last, but not least,

we have a deep and diverse database of

current and historic business information

news and quantitative data. Many

members appreciate and value the wealth

of such data. We, the editorial team of

BIIA, value your contributions to the

www.biia.com and the Newsletter.








3

LATE BREAKING NEWS

Partnerships: Analytics, Decision Software and Platforms Lead the Pack

We briefly covered the topic of acquisitions

announced in 2015 in the March II issue of our

Newsletter. Analytics, software and platform services

were in the lead with 39% of acquisitions tracked in

2015.

For this edition we examined announcements on

partnerships. The results are similar. Analytics,

decision software and platform services are leading

the pack with 52% of the total. Companies appear to

be using partnerships rather than developing such

services on their own. Next in line were business

(14%) and consumer data (13%), and compliance

services (5%). In the category ‘other’, e-commerce

and mobile services were prevalent.

BIIA Member CTOS Malaysia Launches CTOS Score

CTOS Malaysia has launched a new credit scoring system called CTOS Score, aimed at providing banks with

a more detailed evaluation of a consumer’s credit risk, even if the consumer in question does not have a credit

history. According to Eric Chin, CEO of CTOS Data Systems Sdn Bhd, they will be leveraging their proprietary

data for greater risk prediction.

Apart from information from the Central Credit Reference System (CCRIS), we also obtain information from non-

banking sources such as the Companies Commission of Malaysia (SSM) and telecom companies. All these data

sources permit us to get more accurate assessments of a

person’s credit history,” explains CEO Chin.

The launch took place during the inaugural CTOS Global

Forum 2016 with a panel discussion on the role of credit

reporting in the financial ecosystem. Panelist included BIIA

director Lawrence Yee, BIIA co-initiator David Emery of

Reciprocus Singapore and Rory Matthews, CEO of

Compustan Australia & Asia Pacific.

Other contributing experts were Dr. Andrew Jennings, Senior

VP of FICO; Shen Zhihua, Retail Risk Management

Technology director of China’s Ping An Bank; Salome

Pirtakhiya, Head of Retail Risk at Russia’s UniCredit and Kung

Lim Siew Ghee, CTOS head of product development. Source: The Star Online – Metro Section Malaysia





4

MEMBER NEWS

HG Data Disrupts Vertical Sales and Marketing Status Quo

According to a recent Outsell Insight HG Data’s push into new vertical markets serves as a driving force

of change in prospecting and account management processes.

HG Data uses Big Data web-crawling techniques to capture B2B technology installation data that provides

competitive intelligence to sales teams, marketers, and brands. Through supervised machine learning, HG Data

continuously trains machines to identify product information presented on websites and buried in unstructured

documents. The result is a large collection of semantic rules that serve as training sets of text patterns used to

identify specific products, which in turn leads to non-supervised learning.

HG Data recently launched HG Focus, a freemium Chrome extension giving business development and sales

reps instant insight into the technology stack of companies when viewing their webpages. With distribution

partners across contact vendors, CRM, predictive marketing analytics, and retargeting, HG Data is rapidly

expanding their vertical coverage. A series of recent B2B partnership announcements illustrates HG Data’s torrid

pace of expansion:

DiscoverOrg, a provider of highly curated company and contact information, has licensed HG Data’s global

dataset of B2B technology installations that enable creation of new search filters for its prospecting solution.

Integration of HG Data expands the number of searchable technologies by 4,000 and companies linked to those

technologies by 770,000.

HIMSS Analytics, focused on healthcare technology intelligence, has partnered with HG Data to enhance their

data collections and verification efforts. Through traditional research methods, it is difficult to identify at scale

which facilities offer specific treatments, at what frequency, and with what equipment. This information has high

market intelligence (prospects and competitors) value to medical device and machine sales organizations. HIMSS

gains efficiencies and access to broader market coverage. HG Data’s count engine shows they are tracking 263

medical products across 169,000 locations.

MadisonLogic, provider of intent data that supports B2B digital brand and demand solutions, now leverages HG

Data to help marketers identify a prospect’s technology installations. The combination ensures that the right

message gets to the right person at the right time, driving increased conversion and marketing ROI. Expanding

from tracking horizontal technology to include professional services software and capitalized equipment, HG Data

is building out new vertical market offers ranging from real estate to medical to media.

Michael Balsam, Outsell’s VP & Lead Analyst summarizes: “HG Data relies on publicly available data, but has

a huge head start on potential competitors by way of its massive data set and countless cycles spent on machine

learning. Sites can potentially block access to profiling in several ways, but all have elements of self-inflicted

damage such as interfering with search engine indexing.

Beyond the visceral upside to sales and marketing, HG Data puts the competitive intelligence community on

notice. Fully machine-driven analysis of market penetration, market share, and conceivably revenue will

disintermediate both professional service providers and low-scale technology solutions. With the opportunity to

steal from existing CI budgets, HG Data often knows more about where technology products are placed than the

providers themselves. To order the full report click on this link


https://www.outsellinc.com/search/d7entity/51172?mkt_tok=3RkMMJWWfF9wsRonuq%2FAZKXonjHpfsX56%2B8qX66%2BlMI%2F0ER3fOvrPUfGjI4ATMRmI%2BSLDwEYGJlv6SgFTrLHMa1izLgNUhA%3D




5

MEMBER NEWS

Cerved Information Solutions Revenue up by 6.7% in 2015

Revenues: Euro 353.5 million, +6.7% compared to Euro 331.3 million in

2014;

EBITDA: Euro 170.8 million, +6.7% compared to Euro 160.1 million in

2014, resulting in an EBITDA margin of 48.3%;

Adjusted Net Income: Euro 68.5 million, +24.7% compared to Euro 55.0 million in 2014;

Operating Cash Flow: Euro 136.1 million, +7.9% compared to Euro 126.2 million in 2014;

In 2015 the Group’s revenues increased by 6.7%, reaching Euro 353.5 million compared to Euro 331.3 million in

the previous year (1.6% on an organic basis). The Credit Information division grew by 0.9%.

The Financial Institutions segment grew by 2.0%, with such 2 positive performances being driven by the increased

consumption of data by clients and the completion of a number of projects for banks, coupled with strong demand

for appraisals in the real estate segment.

The Corporate segment achieved positive results in terms of sales and consumption, despite registering revenues

which were marginally below last year. We also highlight positive developments in the implementation of the

revamp of the sales force.

The Credit Management division grew by 40.8% and, coherently with results to 30 September 2015, benefited

both from organic growth in each of its three business segments (credit workout, legal services and asset

remarketing) as well as from recent acquisitions (Recus S.p.A. and San Giacomo Gestione Crediti S.p.A.).

The Marketing Solutions division performed below initial expectations, with a decrease of 6.2% compared to the

prior year, due to a different product mix which had a different revenue impact, and a minor contribution from the

corporate sales force which was more focused on achieving its own results for the revamp project. Source:

Cerved Earnings Release

Bisnode Southern Markets Win the Special Golden Practice Award

On 24th March 2016 at the Golden Thread event, Bisnode Southern Markets received a

special award in the category Golden Practice for the Bisnode endeavor development

system and commitment. This ninth year of Golden Thread, a special Golden Practice

Award was introduced which rewards projects, practices, approaches, actions, ideas

and activities directed to an organizational leap and collective progress. There were 16 companies participating in

the competition.

Golden Thread is conducted on the initiative of Dnevnik newspaper with the involvement of economic

(Faculty of Economics) and human resources experts (Faculty of Social Sciences and Faculty of Arts)

from the University of Ljubljana. The aim of Golden Thread is to find the best Slovenian companies, which are

role models and inspiration of the Slovenian economy and the best employers. Source: Bisnode News Release


https://company.cerved.com/sites/company.cerved.dev/files/Cerved%20COS%20FY2015_ENG_vF.pdf

https://www.bisnode.com/group/press/news/bisnode-southern-markets/




6

MEMBER NEWS

Creditsafe Expands its Instant Global Reach

Creditsafe has announced that it has added over 40 million new reports to its system

that are now available to view instantly online. This means the Creditsafe system now

provides information on over 190 million companies in 51 countries, including Australia,

Bangladesh, India, Nepal, Pakistan, Russia, South Korea, Sri Lanka and Taiwan.

Moving into a foreign market can be difficult and there are many aspects to consider when expanding overseas,

including a need for accurate data. To make international trading as easy as possible for its customers,

Creditsafe’s company credit reports have an international score, which allows customers to compare company

credit scores across the globe. By using the same scoring range and risk descriptions for all countries, Creditsafe

makes it easy for its customers to compare reports. The score is designed with simplicity, ranging from A-E, with A

being the lowest risk, D being the highest risk and E being unrated. The credit score is based on the likelihood of

a company becoming insolvent within the next 12 months.

The range of information Creditsafe can obtain in each country will vary. Using official sources and registries,

Creditsafe is able to quickly answer questions about a company’s stability and financial health. Where official

information is not available, Creditsafe will conduct a direct interview with the business and freshly investigate.

Source: Creditsafe News Release

Financial Services Firms Are Defining Conduct Risk – But a Long Way to Go …

Thomson Reuters Survey Shows More Financial Services Firms Defining

Conduct Risk, But Many Have a Long Way to Go in Formally Putting Theory

to Practice. G-SIFIs lead the pack in defining and implementing firm-wide

formal conduct risk policies

Thomson Reuters today announced the findings of a new study revealing that while

many financial services firms are making strides in defining conduct risk, there’s

little tangible progress in their efforts to formally approach addressing it within their organization. Meanwhile,

compared to last year, Globally Systemically Important Financial Institutions (G-SIFIs) have made the biggest

strides in both defining conduct risk and implementing formal conduct risk policies within their organizations.

“Conduct risk is no longer a new concept and it is here to stay so financial services firms are seeing the

importance of implementing a formalized approach to conduct risk inside their organization – that starts with the

creation of a working definition of conduct risk,” said Stacey English, report co-author and head of Regulatory

Intelligence at Thomson Reuters. Thomson Reuters surveyed more than 260 compliance and risk practitioners

from financial services firms -- including banks, insurers and fund managers -- across the Americas, Europe,

Australasia, Asia, the Middle East and Africa to gain insight into how the industry is defining and responding to

conduct risk.

To read a summary of the findings, click on this link.


http://www2.creditsafeuk.com/resources/latest-news/creditsafe-expands-its-instant-global-reach/

http://thomsonreuters.com/en/press-releases/2016/march/survey-shows-more-financial-services-firms-defining-conduct-risk.html




7

MEMBER NEWS

CRIF Signs Service Agreements with 6 Major Banks in Jordan

CRIF Jordan has recently signed Credit Information Service Agreements with Bank Al

Etihad, Capital Bank, Jordan Kuwait Bank, Housing Bank, Standard Chartered Bank

and AJIB Bank, making CRIF the first official provider of credit reports to those

financial institutions. CRIF is the first credit bureau licensed by the Central Bank of

Jordan, and is developing a world-class credit bureau aimed at supporting the development of the Jordanian

economy and facilitating access to credit.

All six Jordanian banks are ready to obtain credit information on their customers through the CRIF Jordan Credit

Reporting System. An accurate and updated credit history including information gathered from all Jordan credit

providers through an advanced technological platform, which integrates all data into one comprehensive credit

report, will optimize and speed up the decision-making process with a positive impact on access to credit and to

financial services, with more favorable loan terms for individuals and companies in Jordan.

In addition, the credit bureau will allow credit providers to confidently assess credit risks and make more accurate

lending decisions.

CRIF Jordan, which is expected to begin providing its services in the next two months, will bridge the gap in

demand for credit in the kingdom, and will help expand credit to wider segments of the economy, especially to

small and medium-sized companies, recognized as the lifeblood of the local economy. Source: CRIF Press Release

CRIF Joins the European AVM Alliance (EAA)

CRIF has become part of the European AVM Alliance (EAA), the organization that

aims to promote and standardize the use of Automated Valuation Models (AVMs)

across the whole of Europe.

EAA, which counts among its 10 members the leading European AVM providers, has set as its main objectives

the promotion of AVMs and their benefits on the property valuation market and the adoption of common standards

between different countries, offering itself as an intermediary for Supervisory Authorities, Rating Agencies,

investors and financial institutions whose interest in AVMs extends across various European countries.

In 2014 CRIF developed and provided the first AVMs on the Italian market for the assessment of any type of

residential property. Thanks to the use of highly sophisticated mathematical models and automated technologies,

AVM assessment today represents the most innovative and accurate technique for providing an automatic

estimate of the market value of residential property. AVMs enable the market value of the residential property

portfolio to be monitored and updated in a timely manner for the purposes of risk mitigation and regulatory

compliance.

As a member of the EAA, CRIF is offering its own contribution on a European level, sharing its expertise and

results of studies and research that it has carried out on the Italian property market. Source: CRIF Press Release,

London and Bologna, March 22, 2016


http://www.crif.com/site/en/News/Press-Releases/Pages/CRIF-signs-service-agreements-with-6-major-banks-in-Jordan.aspx

http://www.crif.com/site/en/News/Press-Releases/Pages/CRIF-joins-the-European-AVM-Alliance.aspx

http://www.crif.com/site/en/News/Press-Releases/Pages/CRIF-joins-the-European-AVM-Alliance.aspx




8

MEMBER NEWS

Veda Celebrates two Years of Comprehensive Credit Reporting

As the two-year anniversary of Comprehensive Credit Reporting (CCR) implementation

approaches, participating lenders have provided CCR data on 24 per cent of retail

Australian credit accounts according to Veda, the data analytics company and leading

provider of credit information and analysis in Australia and New Zealand.

The two-year milestone, reached this month, comes as consumers and lenders alike are starting to experience the

tangible benefits of a comprehensive credit reporting environment. CCR supports responsible lending by updating

credit files with more insights about customers so that credit providers are able to make better-informed decisions

on credit worthiness. CCR is now poised to help more Australians gain access to credit, who may otherwise have

been excluded.

Due to CCR, more than 86,000 Australians who may have been financially excluded under traditional reporting

are better able to access credit because potential lenders can now review their positive loan repayment behavior.

Previously lenders had limited insight into the prior credit performance of these customers. Currently, more than 3

million Australians are financially excluded or denied access to appropriate and affordable financial services and

products such as a transaction account, general insurance and a moderate amount of credit. Source: Veda.com

CIBI Information, Inc. is now a Special Accessing Entity of CIC

CIBI Information, Inc. was appointed as a Special Accessing Entity and the only local

credit bureau accredited by Credit Information Corporation (CIC). According to Marlo R.

Cruz, President and CEO of CIBI Information, Inc., “CIBI has always been a part of the

financial inclusion in the Philippines. This new development about the credit information

exchange in the country made us more excited about the impact we can deliver to the lives of every Filipino.”

The need in establishing a centralized and comprehensive credit information system in the Philippines was set to

be addressed by the creation of Credit Information System Act (CISA) of 2008, otherwise known as Republic Act

No. 9510. CISA prescribed the powers and function of CIC whose primary mandate is to establish a sustainable

credit information system.

“For the first time in the history of the Philippines, we will have credit bureaus available to the public and to the

general business community,” CIC President and CEO Jaime Casto Jose P. Garchitorena declared during the

Financial Infrastructure Development Network (FIDN) Conference on Credit Infrastructure held in Makati last

March 14. Mr. Jaime Garchitorena emphasizes that, “Their operations, of course, are premised on the availability

of the data, at least as far as their relationship with the CIC is concerned, and we envision that complete or

substantial collection of data will happen later this year, probably closer to December 2016 or 2017. So, as far as

their operations are concerned in relation to the CIC, then we are looking at that time frame.”

Six firms were accredited to become a Special Accessing Entity (SAE); five of which consists of international

players such as Compuscan of South Africa, Dun and Bradstreet (US), Crif (Italy), TransUnion Philippines and

Credit Bureau Singapore. Source: CIBI Information Inc.


https://www.veda.com.au/insights/veda-celebrates-two-years-comprehensive-credit-reporting-positive-outlook

http://cibi.com.ph/




9

INDUSTRY NEWS

Dutch Central Bank to Create Prototype Blockchain-Based Currency

The Dutch central bank has committed to developing an internal blockchain prototype dubbed

“DNBCoin”, according to a recent publication. It is a strategy to create a permanent digital replacement

for cash.

Buried in the latest annual report from the De Nederlandsche Bank, published on 16th March, is a tiny item

detailing the experiment. Elsewhere in the report, DNB posits that blockchain tech could improve its business – a

possible indication of how it may look to apply lessons learned

from the DNB project.

Described only as a “prototype coin based on blockchain

technology”, there are no details on the project’s release or

objectives. DNBcoin is mentioned under a heading that loosely

translates to “aims for 2016”, suggesting that the project is a

priority for in-house developers this year.

Mentioned on several occasions during the report, blockchain

technology is offered as possible cost-saver in the financial industry, though the central bank concedes it’s early to

say what possible applications might take shape in the years ahead.

The report states: “[Blockchain technologies] can affect the revenue models [of] banking systems, they

can also benefit with new ways to generate revenue and [reduce] costs.”

As pointed out by payments and banking consultant Simon Lelieveldt, the development signals a desire on the

part of the Dutch central bank to explore blockchain tech as an avenue for swapping physical cash with digital

replacements. “So when we now see central banks moving forward in the electronic cash domain (now

conveniently labelled: blockchain/FinTech) it might no longer be able to spin it off to the market, but to create a

permanent digital replacement of cash,” wrote Lelieveldt. “Therefore, this time it might be different.”

Source: CoinDesk

Credit Insurance: Global Trade Continues to Grow, but Risks Increase

Rising claims hamper positive outlook!

Members of the Berne Union and members of the International Credit Insurance & Surety

Association (ICISA) report a positive development of global trade in 2015 and expect a

mixed picture for 2016.

They expect growth in premium income and insured turnover. However this outlook is influenced by a negative

claims development and an expected increase in insolvencies in almost all regions. Furthermore, the market is not

expected to be as soft as in 2015, especially in Africa, MENA region and Latin America.

To read the full report click on this link


http://www.dnb.nl/binaries/Jaarverslag%202015_tcm46-339389.pdf

https://www.linkedin.com/pulse/dutch-central-bank-experiment-blockchain-based-simon-lelieveldt

http://www.slideshare.net/JaimeCubilloFleming/icisa-berne-union-global-trade-continues-to-grow-but-risks-increase

http://www.biia.com/dutch-central-bank-to-create-prototype-blockchain-based-currency/central-banks-on-digital-currency




10

NEWS FROM CHINA

China Internet Finance Association Launched

New China Internet Finance Association draws 400 members

The establishment of a national Internet finance association plays a crucial role

for the healthy development of China's burgeoning Internet finance sector,

according to industrial insiders

"Industrial rules should be introduced to regulate the Internet finance sector,

which has already proved to be effective in promoting efficiency, reducing costs

and satisfying diversified investment needs," said Pan Gongsheng, vice-governor of the People's Bank of China.

Pan's remark came after the establishment of the China Internet Finance Association, the highest-level

national industrial self-regulatory organization, which was established by the People's Bank of China, China's

central bank, in Shanghai on March 25. After an inaugural meeting, more than 400 institutions became members

of the association. Groups joining include financial institutions, such as banks, securities companies, funds,

insurance, trusts and consumer finance companies, and other organizations, such as guarantee companies, credit

services and Internet peer-to-peer companies.

A number of comprehensive Internet finance companies, including CreditEast, Lufax and Wangxin, were elected

as executive directors with the association. Tang Ning, founder and chief executive officer of CreditEase, a

Chinese peer-to-peer wealth management company, said the company would provide more online financial

services in accordance with industrial rules. "We will optimize the online platform service, aiming to develop into a

role model company in the Internet finance sector," Tang said.

CreditEase reached an agreement with China Guangfa Bank early last year to help safeguard investors on

Yinrenda.com, one of the Chin's leading P2P lending and wealth management providers. Source:

Chinadaily.com

HC International 2015 Revenues Down 5.2%

HC International, a leading online B2B information services provider in China, reported total revenue of US$141

million for the year ended on 31st December 2015, down 5.2% compared to last year. The Group’s EBITDA was

US$19 million, down by 56% year-on-year. The dilute earnings per share in the year were RMB 0.0679

(US$0.010).

Just more than 80% of the group’s revenue, online services business shrank by 9.8% year-on-year to US$113

million. The second largest business segment, seminars and other services grew by 7.3% year-on-year to US$17

million. Trade catalogues and yellow page directories business dropped by 49% year-on-year, to US$2.8 million.

The remaining revenues were generated from the anti-counterfeiting products and services (US$8.5 million) and

financing services (US$7,100).

Source: Business Strategies Group Hong Kong – www.bsgasia.com


http://m.chinadaily.com.cn/en/2016-03/28/content_24143657.htm

http://www.bsgasia.com/




11

REGULATORY NEWS

The European Central Bank (ECB) and its Work on Anacredit

What is AnaCredit

For those of you who don’t know already, AnaCredit, which stands for “analytical

credit datasets”, will be a new dataset with detailed information on individual bank

loans in the euro area.

The European Central Bank (ECB) initiated the AnaCredit project in 2011. The

proposed database will be based on granular credit data reported by National

Central Banks (NCBs) which in turn will be collected by each participating NCB

from credit institutions, and subsidiaries and branches of credit institutions in their

Member States. It is being implemented to better support several central banking functions, such as decision-

making in monetary policy and macro prudential supervision following the financial crisis.

Proposed Regulation

On 4 December 2015 the ECB published draft regulation on AnaCredit for consultation, setting out the reporting

requirements and defining the reporting population. Whilst the ECB is not required to consult on proposed

regulation it chose to do so in this case based on concerns raised about the scope of the project.

The key points contained in the draft regulation are:

Implementation

It is proposed that the project will be implemented in stages. The first stage will commence in March 2018. The

timeline for subsequent stages is not provided for in the draft regulation, but the draft regulation envisages that in

subsequent stages the scope of AnaCredit may be extended in terms of credit institutions, reported instruments

(possibly including credit extended to natural persons) and adding the requirement to report on a consolidated

basis.

Scope

AnaCredit primarily targets the euro-area (i.e. Member States that have adopted the euro as their currency).

However, importantly, its scope expands to non-euro area countries - through branches and subsidiaries of credit

institutions. In particular the reporting requirements under the draft regulation cover the following types of entities:

1. Credit Institutions resident in euro area EU Member States;

2. Euro area-based branches of credit institutions (regardless of the home country of the credit institution);

3. Foreign branches controlled by credit institutions resident in the euro area (regardless of the jurisdiction

where such foreign branches operate).

In addition, EU Member States that are not part of the euro area may (and are encouraged by the ECB to) join

AnaCredit on a voluntary basis. In such a case, the AnaCredit regulation and related reporting obligations will be

binding to the NCBs and private credit institutions of the Member State in question. (Continued on next page)





12

REGULATORY NEWS

Anacredit (Continued from Previous Page)

In the first stage of AnaCredit implementation the reporting obligations will cover only credit extended to legal

entities (including SMEs) that are not natural persons. Credit extended to natural persons (including mortgage

credit) will not be covered but according to the draft regulation, subsequent stages of AnaCredit implementation

could potentially include this.

Loans and deposits are the only instruments considered in the first stage of AnaCredit implementation. This

includes:

a. Deposits

b. Overdrafts

c. Credit card debt

d. Revolving credit

e. Credit lines other than revolving credit

f. Reverse repurchase agreements

g. Trade receivables

h. Financial leases

i. Other loans

Other instruments, such as credit derivatives and off-balance-sheet items are excluded from the scope of

AnaCredit at the first stage of implementation, but could be included in subsequent stages.

Reporting thresholds

The reporting obligations under the draft regulation will apply if the commitment amount by a given debtor equals

or exceeds the following thresholds:

EUR 100 for non-performing instruments

EUR 25,000 for performing instruments (all relevant instruments combined)

Data attributes and datasets

Credit institutions covered by AnaCredit will have to report to National Central Banks up to 94 data attributes

related to:

a. the reportable instrument

b. the collateral or guarantee securing the instrument

c. debtor (counterparty using the instrument) or counterparty providing the collateral/guarantee.

(Continued on next page)





13

REGULATORY NEWS


Feedback loop

The draft regulation allows (but does not require) NCBs to provide credit data collected

under AnaCredit, including cross-border data, to credit institutions by establishing or

enhancing feedback loops or other information services from Public Credit Registers

(PCRs) to credit institutions. However, the draft regulation also provides for a restriction

on the use of such data by credit institutions - the data may only be used for managing

credit risk and should not be shared with third parties.

Right of access and rectification of data

Legal entities on which data is reported will be entitled to access their data subject to appropriate protection of the

legitimate interests of the credit institution and third parties. They will have the right to request credit institutions to

rectify incorrect data about them. National Central Banks will be allowed to deny such access if they do not

provide a feedback loop and if such access is not required by other EU or national legislation/regulation.

Collecting data from alternative sources

The draft regulation allows NCBs to collect data necessary to comply with the AnaCredit requirements, from

sources other than from credit institutions directly (including e.g. other public authorities, private credit reporting

service providers) - if the quality of data collected this way can be ensured.

BIIA’s Position

BIIA recognizes the need of the European Central Bank (ECB) to hold such a database and therefore supports

the creation of AnaCredit as a pan-European system for collecting, and storing credit data, in order to assist the

ECB in performing its functions.

In addition to supporting the statistical, research, policy analysis and supervisory functions of the ECB, the

AnaCredit project has the potential to improve the availability and quality of credit data across the EU, which could

in turn play an important role in supporting sustainable growth and financial stability in Europe.

However, BIIA and other associations representing the credit reporting industry do have significant concerns

regarding the proposed scope, and implementation mechanism of the project as outlined in the draft regulation

and its potential unintended consequences on the credit reporting infrastructure in Europe and further afield.

These concerns can be summarized as follows:

1) BIIA has strong doubts regarding the legal basis chosen by the ECB for the draft regulation. In particular, BIIA

believes that the contents of the draft Regulation, and especially the provisions concerning collection of

granular data on individual loans and borrowers and concerning the feedback loop, go beyond the scope of

statistical data collection permitted by Council Regulation (EC) No 2533/98.

(Continued on next page)





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REGULATORY NEWS


2) The ECB has not specified clear objectives of the draft regulation and has not

justified the proportionality of the requirements of the draft regulation to its objectives.

3) The provisions on the feedback loop could have distortive effect on the credit

reporting infrastructure and endanger the activities of BIIA members who operate as

Private Credit Bureaus (PCBs). Should the feedback loop provisions be maintained in

the final regulation, they should be revised in order to ensure that the level playing

field between PCRs and PCBs, as well as in terms of sufficient harmonization across

the euro area, is preserved.

4) The draft regulation lacks provisions to ensure appropriate legal and technical safeguards to protect the data

collected under the AnaCredit (including protection of bank secrecy) and sound governance of the AnaCredit

database.

5) The draft regulation should require NCBs to use alternative sources of information and the existing credit

reporting infrastructure (including PCBs) where this would reduce the reporting burden for reporting agents.

Next steps

BIIA has responded to the ECB on behalf of its members raising the concerns outlined above.

The ECB, together with National Central Banks, is currently assessing all the observations received as part of the

consultation process and as a result, an amended version of the draft regulation is expected to be

submitted to the Governing Council of the ECB for adoption not earlier than April 2016.

It is hoped that the concerns raised by BIIA and others will ensure the amended regulation

recognizes the important role played by Private Credit Bureaus and the need to ensure that this is

not jeopardized as an indirect consequence of the project.

Anacredit has the potential of being a game changer for the credit information industry,

therefore watch this space for further updates

About the Author: Neil Munroe is a member of the BIIA Board of Directors and member of BIIA Regulatory Committee. Neil

can be reached at: e: [email protected]

Neil reports every two weeks on European Regulatory affairs which can be accessed on:

http://www.biia.com/category/regulatory-news/regulatory-monitoring-reports

BIIA monitors regulatory affairs globally: http://www.biia.com/category/regulatory-news

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