This paper looks at the steps that a credit provider needs to consider to successfully introduce CCR data into their applications process to realise benefits.
The originations process is complex and requires strong change management disciplines. To implement CCR, credit providers will need to work through a series of steps to set business objectives and determine the right time to participate.
As at March 2016, 24% of the retail credit market supplied CCR data to Equifax. With a quarter of the market participating, real benefits are emerging for lenders and consumers alike.
This infographic breaks down the attributes and benefits of the data supplied to date including:
Access to credit to those previously underserviced
How CCR uncovers lending relationships
Credit score averages (negative and comprehensive)
Growth opportunities identified by CCR
Data improvements with more regular CCR data loads
For most, CCR is an acquisition tool that allows organisations to grow their lending books without increasing risk, or to maintain their current portfolio size while reducing risk. Far more than just an originations tool, CCR can benefit portfolios at every stage of the credit lifecycle. The truth is no consumer credit providers’ business strategy is complete without a holistic approach to CCR.
For Peter Coe, Chief Risk Officer at BMW Financial Services, being one of the leading auto-financiers to implement CCR is critically important in a highly competitive auto-finance market.
“Banks and other multi-product lenders have access to more readily available information about a customer via a banking relationship. For us, CCR gives us immediate access to a broader picture that
will allow us to make more efficient credit decisions based on an individual’s current credit exposure"
CCR holds the promise of something for everyone. Risk managers like CCR because they can more accurately manage risk in a portfolio. Technologists and operations teams like CCR as it supports automation. Disruptive players like CCR because they can introduce new risk-based priced products to the market. But the real winners from all of these are actually the end customers, consumers.
March 2015 marked 12 months since Comprehensive Credit Reporting (CCR) became a reality in Australia. Over the past year, we've seen the market begin to change and our predictions about CCR put to the test. Equifax is in a unique position to report back on the overall industry changes brought about by CCR. In the past, we theorised about who would be the first to participate and how they would approach their implementation. Now we can test those theories against what has actually transpired in Australia.
Globally, it is best practice for credit providers to have portfolio management solutions that utilise data from credit bureaus.
With data from your internal systems only you may not know:
If an up-to-date customer is experiencing financial difficulty elsewhere
If a customer in early collections is likely to self-cure
If a customer in late collections is likely to recover.
Equifax’s Portfolio Management Solutions provide external insights to assist your business in completing the credit risk picture of your existing customers.
Acquiring and engaging a new generation of members is central to the success of your organisation going forward. Are you equipped to protect the interests of your member base in a digital world? Equifax can position you for the future with solutions to:
Identify and on-board high quality prospects
Meet AML obligations and protect members from fraud
Growth and automate your lending book with CCR
Due diligence for commercial and property solutions
For a long time, comprehensive credit reporting (CCR) has been a concept that was very much the domain of credit risk. This outlook is set to change as CCR is applied to business areas other than risk in order to grow revenues, reduce bad debt and improve customer experience. The 2012 market leading CCR pilot study by Veda (now Equifax), the largest of its kind, enabled Equifax to consider all critical factors and gain valuable insights relating to CCR in Australia.
