The UK Government has designated BIIA member Creditsafe to receive credit information data on businesses (SMEs) from banks.. That is a first for the UK to give a commercial credit information company CRA status.
- Appointment follows call in Small Business Act 1 for credit reference agencies to be designated to receive credit data from banks
- Designation process underpins initiative to improve UK finance markets and increase access to finance for smaller businesses
- Creditsafe chosen on basis of breadth of customer base, excellence of in-house product development and strict governance and security procedures
Creditsafe confirmed that it the UK Government has recommended it as a designated credit reference agency (CRA). The new appointment, announced in yesterday’s Autumn Statement, means that Creditsafe is one of only three CRAs that will be trusted by HM Treasury to receive SME credit information held by banks. It will contribute to a wider initiative introduced by the Small Business Act 2015 to increase financing opportunities for smaller businesses.
Creditsafe’s role as a designated CRA will be to receive SME credit information from designated banks and provide equal access to this information to all finance providers. This is a significant milestone in a major structural reform that will promote competition in the SME credit market.
During the application process the British Business Bank which was handling the process for Government stated: “The control of credit information by existing providers is a barrier to entry in the market for lending to smaller businesses. Opening up access to credit data held by the big banks will increase the reliability of credit scores, enabling alternative finance providers to make better-informed decisions about finance provision to smaller businesses.”
Creditsafe has been recommended to be designated as a CRA following a detailed due diligence procedure that analysed agencies’ capabilities in areas such as in-house product development skills to support the integration of bank data with existing credit reports, security and governance management and certification to relevant quality standards including ISO/IEC 27001:2013.
Creditsafe Group
The Creditsafe Group is one of the world’s most used supplier of company business intelligence with 10 Creditsafe Group reports downloaded every second. Privately owned and independently minded Creditsafe is looking to change the way business information is used by providing high quality data in an easy to use format that allows everyone in an organisation can benefit from. Launched in Norway in 1997, Creditsafe has offices in the UK, Germany, France, Sweden, Ireland, Italy, Belgium, the Netherlands and the USA employing over 1000 people and has more than 80,000 subscription customers, across the group.
Source: Creditsafe Press Release
1 Small Business, Enterprise and Employment (SBEE) Act 27 March 2015
Implications: In the UK the commercial credit information has finally achieved a level playing field. This is good news for commercial credit information and the concept of pooling of bank information on commercial enterprises.
The announcement of UK government came as part of the Chancellor of the Exchequer, George Osborne’s Budget Statement on Wednesday 8 July 2015, on the state of the national finances, Government’s proposals for changes to taxation and growth forecasts. The Chancellor’s statement reads as follows:
1.221 To support small and medium sized enterprises (SMEs) in accessing finance, the government plans to designate Experian, Equifax and CreditSafe under the Small and Medium Sized Business (Credit Information) Regulations 2015. These CRAs will receive SME credit information from designated banks and provide equal access to this information to all finance providers. This is a significant milestone in a major structural reform that will promote competition in the SME credit market.
Source: UK Government
