The German Credit Management Association recently held its 2011 conference and exhibit in Frankfurt/Main. The conference focused on the topic of value creation through greater availability of internal and external information. A number of presentations centered on methods in how the effectiveness of credit management can be measured. The conference was well attended by credit professionals, information suppliers and members from the academia.
During recent years the availability of German public sector information was greatly improved through more stringent disclosure requirements coupled with appropriate enforcement mechanisms. German information companies reacted promptly by generating new products and improving their content. How these products can potentially contribute to value creating was at the core of the debate between users and information providers. For instance, in one of the discussions the question was raised as to whether the new information products offered by the public sector could replace traditional credit information. Far from it, was the response from credit information suppliers. Essentially credit information suppliers maintain a ‘clearing house’ of critical information compiled from a range of independent sources in addition to public sector information.
Internal data on clients and prospects are also an indispensable part of risk assessment. However, the organizers of the conference noted in their opening comments that companies are not always making the best use of such data. The cause may be that the data is contained in different data silos or credit management lacks the tools to integrate external and internal information. This apparent deficiency prompted the organizers of the conference to examine information elements and products which are critical for an effective credit management. While the identification of potential risks and loss prevention are important factors, it was suggested that credit management should also focus on ‘the credit potential’ of new and existing customers, thus assisting marketing and sales in their important task to grow their respective businesses.
As in the past the organizers of the conference were successful in creating a useful dialog between credit management and credit information providers leading to a better understanding of current credit management issues and the availability of credit information / management tools.