Key lessons from 30 plus years in credit data

The credit data landscape has undergone huge shifts over the past few decades. As longtime veterans who have navigated this complex, ever-evolving industry for over 30 years, we have witnessed these changes firsthand.

Data has become increasingly commoditised, as new technologies disrupted the status quo. And regulators have stepped in to address emerging data gaps. 

Drawing on decades of experience, we share our key insights to help credit providers be proactive rather than reactive.👇

The importance of transparency

After witnessing firsthand how credit providers were often trapped into rigid contracts, we knew there had to be a better way. The answer: to bring transparency and impartiality to a sector plagued by opaque pricing and closed-door negotiations.

As former bureau directors, we understand all the nuances – from varied pricing structures to the importance of flexible multi-bureau strategies. 

Our mission is to bring openness and fair pricing to a complex industry via unbiased insights. 

So let’s get into the key lessons… 

Lesson #1: Be proactive in the evolving data landscape 

Over our decades in the industry, we have witnessed seismic changes as the credit data landscape continues to evolve. Pricing has become highly commoditised and competitive. 

And technology advancements like cloud-based decision platforms now enable much greater agility and advanced analytics capabilities. Not to mention, new ID verification solutions help dramatically improve customer onboarding and reduce fraud.

Most importantly, regulators like the FCA have identified major data gaps across the three main credit reference agencies in their latest Credit Market Review. This underscores the growing need for multi-bureau strategies to fill blind spots.

Our advice is to prepare for ongoing changes by:

• Taking a flexible, multi-bureau approach to get a more comprehensive view of consumers and avoid data gaps. Why? Because the FCA found significant instances where data was held at one CRA but not others.

• Implementing new customer data and decisioning technologies like single customer view platforms to enable more holistic risk assessment.

• Structuring contracts to be adaptable as your needs change, rather than locking yourself into rigid terms.

Lesson #2: Challenge the status quo

A common predicament we see with credit providers is feeling trapped with a single, dominant bureau. This is often due to perceived switching costs and potential impacts on the relationship.

But in reality, taking a multi-bureau approach can strengthen relationships and achieve superior pricing through competition. 

Our advice is not to settle early in negotiations or fall for sales tactics pressuring quick decisions. Providers can often save 40% or more on data costs by taking the time to benchmark pricing and challenge the norm. 

Also, don't assume that higher minimum volume commitments automatically mean better pricing. This is another tactic used to restrict flexibility. 

The bureaus would prefer clients stick to the status quo. But major savings can be achieved by shopping around, maintaining leverage, and refusing to overpay compared to industry benchmarks. The key is to negotiate from a position of strength. 

Lesson #3: Data benchmarking requires insight

One of the biggest misconceptions we encounter is the belief that credit providers can effectively benchmark bureau data pricing themselves. In reality, conducting independent, like-for-like benchmarking is extremely complex. 

“The diversity of pricing structures, product bundles, and contract terms requires highly experienced external partners working with procurement and risk. Rather than going it alone, providers should engage independent experts to handle in-depth benchmarking across bureaus. This is the only way to get the full accurate picture.”

Internal teams often lack the broad market insights and peer comparisons needed to properly evaluate their existing contracts. Bureaus exploit this information asymmetry in negotiations.

In summary, impartial external benchmarking is crucial to resetting bureau negotiations on your terms. The truth is: bureaus rely on providers remaining in the dark. 

Keep up with the evolving credit data landscape

As data products and analytical solutions become more advanced, procurement and risk teams need much deeper understanding to make strategic decisions. The pricing structures for data are increasingly complex. 

The available data sets are expanding exponentially. And new technologies are coming to market rapidly.

Over 30+ years navigating constant change, our key lessons are:

• Always challenge bureaus. The status quo likely won't offer the best deal.

• The complexity is hard to go at it alone. With experience, you can cut through it.

• With the right strategies, credit providers can stay agile and maximise value.