Commercial credit information in Germany is becoming incestuous as SCHUFA, Germany and Coface, Germany are joining hands to pool commercial company data and payment information.  The “CS Connect” joint venture is to boost the prospects of SCHUFA BusinessLine, notwithstanding SCHUFA’s partnership with Buergel and the Creditreform partnership with Coface. 

The alliance with Coface will certainly add over time critical mass to SCHUFA’s b2b credit information business in terms of positive and negative trade payment experiences, which form the backbone of reliable and predictive credit scores.  This development indicates that Buergel may not have that capability forcing SCHUFA to look for an alternative.  

Coface, as a credit insurer has a huge amount of positive and negative trade information from credit insurance transactions.  Creditreform, which holds a commanding lead in b2b credit information with 70% of market share, has amassed a data pool of 70 million trade payment experiences.  Obviously SCHUFA intends to catch up in order to capture market share.   The SCHUFA / Coface alliance may over time deflate the value of Buergel as a partner to SCHUFA.   Obtaining better data from Germany will also strengthen Coface’s cross border information business.   It will also permit both companies to deploy analytics more effectively with the availability of trade information.  A surprising factor is that Creditreform has a JV with Coface to create a global company identifier (EASY Number) (EPS insight 16/03/2006). Creditreform is now very disappointed by the latest action of their partner of supporting a new competitor.  This alliance is bound to upset competitive landscape in Germany.  Source: SCHUFA and Outsell Insight.

BIIA Newsletter Nobember 2008 Issue