New regulatory developments put CCR back on the agenda
In March this year a sigh of relief was heard from Credit Risk Managers and Analysts across Australia. This was in response to a ground breaking determination made by the Office of the Australian Information Commissioner (OAIC), which removed many of the significant roadblocks that had been stifling the uptake of Comprehensive Credit Reporting (CCR) over the previous 12 months.
CCR, with all of its potential to transform the risk management industry, is now back on track to delivering better approval rates and decreased collection costs. This is a development that will likely see credit providers jostling for position sooner rather than later, as the industry prepares to take full advantage of CCR data.
The change that kick started CCR again
Early 2016 saw a shadow creep over the enthusiasm for CCR.
The draft determination by the Financial Ombudsman Service of Australia regarding the appropriate reporting of Repayment History Information during an informal payment arrangement threw a major benefit of CCR out the window, reducing an incentive to take up CCR.
The highlight this past month was undoubtedly the response from the OAIC confirming their view regarding the appropriate reporting of Repayment History Information (RHI) during a temporary payment arrangement.
The Productivity Commission mass participation deadline is fast approaching
This OAIC ruling snaps at the heels of the fast approaching deadline on critical mass.
The Inquiry was designed to investigate the merits of compulsory involvement in CCR, and set a 2017 deadline to encourage voluntary CCR sign up. Should voluntary take-up be considered too slow to improve industry efficiency, the Productivity Commission will consider enforcing mandatory CCR participation.
Where to from here?
Action now, rather than later, is the smarter move. Pre-empting this decision by the Productivity Commission and responding to the new OAIC ruling, shrewd credit providers are moving fast to get ahead of the pack. Many are already working to take advantage of the CCR benefits and secure more market share before the influx of competition for this data.