banks data share

Banks to share your company data?

Later this year the big banks will start sharing the data they have on your company with 3 Credit Rating Agencies…

… who will then package it up with their existing data and pass it on to whoever’ll pay for it…

Obviously you have to agree… but equally obviously your agreement will be buried in your bank’s Ts & Cs… that you never read…

Good Thing?

Hell yeah…

The Credit Ratings of Owner Managed Businesses rarely reflect reality… and that’s because of the dearth of info out there for the agencies to use…

Agencies & the financial community aren’t firemen… they don’t rush to danger… they step back in the face of little or no information… and SME credit ratings suffer as a result…

So the more data they’ve got to work with the better… and Experian are pretty clear that commercial data from banks… “tend to be predominantly positive rather than negative”

A perfect market needs perfect information… so information asymmetry is a perfect place for some Government supply-side intervention…

Here’s their thinking

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.

But this is about much more than financing decisions…

Most of you aren’t looking for funding… but better Credit Scores do so much more than help raise money…

… they can help Owner Managed Businesses attract new Customers and get better terms from Suppliers too…

… so what’s not to like?

 

Sources

Government Announcement on the Credit Data Sharing

Right now they’re testing the security of the sharing system between the banks & the Credit Agencies… expect it to be live later this year

Banks that’ll be sharing the Information on their SME customers

Banks can’t share info on companies that are no longer their customers… so if you’re sensitive to this data-sharing… time to find a bank that’s not on the list and move?

Who they’ll be sharing Info with (the 3 Credit Agencies… scroll down)

Expect more agencies to apply to become involved when the Government re-open applications, probably later this year

The actual Regulations… for Geeks who like going to the actual source… like me 

Interesting to note this in the Regs

3.—(1) A designated bank must provide credit information that it holds about each customer of the bank which is a small or medium sized business to a designated credit reference agency

My underlining… hopefully this loose wording means it’ll not just apply to Limited Companies… but partnerships too…  the Credit Agencies really do struggle to rate them… because Partnerships don’t have to file accounts etc at Companies House ?

 

1 reply

Trackbacks & Pingbacks

  1. […] so whilst I welcome some government intervention in the Owner Managed Business sector… I worry that they’re over-reaching a tad… […]

Comments are closed.