Multi-bureau searches the way forward

Sept 2005

Over 48 per cent of lenders questioned are looking to implement a multi-bureau solution to help them run more effective credit checks on their customers, according to research undertaken by pancredit and Windsor Consulting Group. A survey of credit risk executives found that lenders are increasingly turning to secondary bureaux to enhance checks and help reduce fraud.

The survey also discovered that almost half of all respondents already consulted a secondary credit bureau. Of these, 77 per cent have the service for contingency purposes and 23 per cent use a secondary bureau to re-check all applications. According to pancredit, this highlights the need for a multi-bureau interface within a lender’s credit decisioning systems so that the right agency can be used at the right time.

Almost two thirds of companies progressing towards multi-bureau or wishing to, believe that the most significant benefits would be gained in underwriting and credit loss reduction. However, respondents from companies already using multiple bureaux identified money laundering and fraud prevention as major benefits along side reduced bad debts.

Murray Bailey, managing director, Windsor Consulting identified that the majority of credit risk executives appreciated the potential advantages of automated decisions derived from multiple credit references. “On the surface their seems little benefit in multi-bureau, however more data invariably leads to better decision making. As credit bureaux differentiate themselves further, there will be competitive advantage as well as the financial benefits.”

Peter Constance, managing director, pancredit, adds, “This research highlights a clear requirement for automated decisioning systems to be able to access data from multiple bureaux. By doing this, they will achieve improved discrimination, especially for marginal deals, eliminate the problem of failed searches and reduce fraud.”

	Multi-bureau searches the way forward Sept 2005 Over 48 per cent of lenders questioned are looking to implement a multi-bureau solution to help them run more effective credit checks on their customers, according to research undertaken by pancredit and Windsor Consulting Group. A survey of credit risk executives found that lenders are increasingly turning to secondary bureaux to enhance checks and help reduce fraud. The survey also discovered that almost half of all respondents already consulted a secondary credit bureau. Of these, 77 per cent have the service for contingency purposes and 23 per cent use a secondary bureau to re-check all applications. According to pancredit, this highlights the need for a multi-bureau interface within a lender’s credit decisioning systems so that the right agency can be used at the right time. Almost two thirds of companies progressing towards multi-bureau or wishing to, believe that the most significant benefits would be gained in underwriting and credit loss reduction. However, respondents from companies already using multiple bureaux identified money laundering and fraud prevention as major benefits along side reduced bad debts. Murray Bailey, managing director, Windsor Consulting identified that the majority of credit risk executives appreciated the potential advantages of automated decisions derived from multiple credit references. “On the surface their seems little benefit in multi-bureau, however more data invariably leads to better decision making. As credit bureaux differentiate themselves further, there will be competitive advantage as well as the financial benefits.” Peter Constance, managing director, pancredit, adds, “This research highlights a clear requirement for automated decisioning systems to be able to access data from multiple bureaux. By doing this, they will achieve improved discrimination, especially for marginal deals, eliminate the problem of failed searches and reduce fraud.”