Regional Meeting - BIIA.com€¦ · • Provide a neutral, open forum through which business and...

Regional MeetingPhnom Penh, Cambodia

March 14th to 15th, 2018

Event sponsored by:

Event supported by:

International Finance Corporation –part of the World Bank Group

Introduction to BIIA

Introduction to BIIA

• Who We Are

• BIIA Mission

• Membership Benefits

Outreach & Market Engagement

Industry Advocacy

Information Resources

Conferences & Networking

• Current Membership

• BIIA Governance - Leadership

Who We Are

The Business Information Industry Association (BIIA) is a trade association for

providers of a wide range of BOTH business and consumer information

services that help businesses manage growth and reduce risk.

Our members’ services spectrum includes information providers, platforms,

workflow software, decision systems, identity and authentication services,

compliance and risk assessment tools.

The largest member segments are consumer credit bureaus, commercial

credit information companies, business information and software providers

supporting digital commerce.

BIIA was formed in 2005 in Hong Kong by

regional industry members as a regional

association. By 2007 the association had

achieved global membership.

BIIA is registered in Hong Kong as a Limited

Liability Corporation by Guaranty. BIIA is a

Not-for-Profit Organization.

BIIA Mission

• Provide a neutral, open forum through which business and consumer

information providers and users, regulators, and government and public

information sectors can debate and resolve common issues

• Promote the information content industry by demonstrating the value of

information for businesses and national economies

• Serve as a resource on industry standards, trends, technological

developments, and policies

• Advocate a legal regulatory environment beneficial to the industry

• Provide a valuable platform for networking

Member Benefits - Outreach

Information Resources: Members are entitled to have free access to BIIA.com

proprietary industry and regulatory data compiled and analyzed on behalf of the

membership.

Networking: Conferences

Market Engagement: BIIA Participates in International and Regional Forums on

behalf of its members. BIIA works on international councils such as the World

Bank’s International Committee on Credit Reporting, The IFC’s SME Finance

Forum, Financial Infrastructure Development Network (FIDN), a part of the

APEC / ABAC financial infrastructure; B20 Taskforces on access to finance for

SMEs and Digitization

BIIA monitors and compiles

data and insights on industry

and regulatory developments

almost on a daily basis.

The BIIA database contains

over 9,000 articles of industry

announcements, white papers

and market research

documents.

Member Benefits: Industry Advocacy

• BIIA regards industry advocacy as one of BIIA’s principal responsibilities to

keep membership informed of regulatory developments and assist with best

demonstrated practices when needed.

• BIIA publishes a monthly Regulatory Newsletter keeping members informed

of significant developments in policy dossiers being worked on particularly in

Europe (most prolific) and in other geographical territories.

• The industry advocacy activity is ably supported by the regulatory committee.

Committee Chair

Tony Hadley, Senior

Vice President,

Government Affairs

and Public Policy at

Experian

Dennis Ambach,

Vice President

Government

Relations at

TransUnion

Dr. Axel Bysikiewicz:

Section Manager for

Corporate

Governance at

SCHUFA Holding AG.

Germany

Peter Sheerin, BIIA

APCCIS Committee

Chair & Member of

the Executive

Committee

Lawrence Yee,

BIIA Director –

China Regulatory

Affairs

Neil Munroe, BIIA

Deputy Managing

Director, BIIA

Executive

Committee CRS

Insights Ltd.

Member Benefits - Information Resources

• Technology Drives Digitization - An Imperative for BIIA Members to

Stay Informed - BIIA Monitors the Ecosystem

LATE BREAKING NEWS BY CATEGORIES

Analytics/AI Blockchain Business Information Compliance

Cyber Security Credit Bureau News Data Digitization

E-Commerce Financial Inclusion Fintech Fraud

Identity Privacy Regulatory News Technology

Information Resources - Example 1

• Who Grows – who does not? - A quarterly review of revenue growth

-1

11

-3

3

16

3

15

6

11

1918

12

24

7

-5

2

7

-3

3

810

11

45

3

7

-8

4 45

7

1816

5

14

109

-4

2

7

24

7

16

12

-10

-5

0

5

10

15

20

25

30

Ac

xio

m

BO

L T

ha

ila

nd

Cerv

ed

Co

reL

og

ic

Cre

dit

refo

rm

Cre

dit

sa

fe

D&

B

Eq

uif

ax

Ex

pe

ria

n

FIC

O

GB

Gro

up

Info

rma

D&

B

Mo

od

y’s

S&

P G

lob

al

Tra

ns

Un

ion

Ve

ris

k A

na

lyti

cs

Q1 2017 Q2 2017 Q3 2017 Q4 2017 Annual Growth 2016

Revenue Growth in % as reported of 02/18/2018

Information Resources - Example 2

• Who acquires what? - A quarterly review of acquisitions, partnerships,

internal product development and international expansion

Global Readership BIIA Website

Source: Google Analytics (differences in totals due to rounding).

USA 25%

Brazil 2%

Rest of Americas 2%

India 10%

China 4%

Hong Kong 2% Japan 2%

Malaysia 2%Philippines 1%

Thailand 1%Australia 1%

United Kingdom 14%

Germany 4%

France 2%

Italy 2%

Russia 2%

Spain 2%

Sweden 1%

Netherlands 4%

Belgium 2%

Rest of Europe 6%

ME Africa 4% Not Assigned 4%

Singapore 1%

Americas

29%

Asia 27%

Europe

MEA 41%

0 0 2

3022

-6

14

34

54

Conferences and Networking

BIIA The BIIA Network

2005 2010 2015 2017

1,100

3,200

4,300 Information Professionals

Current Membership

13 15 15 16 1620 20 21

25 2734 36 37 40

34 7

13 1310 12

1919

23

25

3033

33

0

10

20

30

40

50

60

70

80

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*

*As of February 25, 2018.

Full Members Associate Members

16 1922

29 29 30 32

40

44

50

59

6670

73

Full Members

Associate Members

Full Membership: Participation in Industry Advocacy and Association Governance:

Board Membership, Voting Rights, Policy Decisions

Associate Membership: Passive, Access to News

BIIA Governance: The Leadership Team

Mr. Thirachai P., BIIA

Chairman (nominated)

Former Central Banker

and Former Finance Minister

of Thailand

Joachim C Bartels,

Co-founder of BIIA,

Managing Director &

Executive Committee

Member

Neil Munroe, BIIA

Deputy Managing

Director, BIIA

Executive Committee

CRS Insights Ltd.

Enrico Lodi, BIIA

Executive Committee,

CRIF

Peter Villa, BIIA

Executive Committee,

Schufa

David Worlock, BIIA

Chairman retiring

Industry Expert

Adrian Ashurst,

Worldbox

Mark Cochrane

Business Strategies

Group

Shahid Charania

Equifax

Dan Meder

Experian

Ruth P. Stevens

B2B Marketing Expert

Surapol Opasatien

National Credit Bureau

of Thailand

Lawrence Tsong

TransUnion

Lawrence Yee

Entrepreneur

• Industry Know-How

• Leadership

• Competence

• Experience

18

Global Industry Trends and Key Regulatory Themes


10 Key Trends Keeping Information Executives Awake

19

Compliance

Fintech

Blockchain

E-Commerce

Fraud Prevention

Cyber Security

Identity

Analytics/AI

Regulatory

Digitization

Business Information industry Association - All Rights Reserved

20

Cyber Security Current Trends / Takeaways

Business Information industry Association - All Rights Reserved 20

• 2013 BIIA alerts members about data breaches and cyber security risk

• 2014 BIIA enters into an alliance with Cyber Security Intelligence - proving insights on key issues

• 2015 BIIA 10th Anniversary featured a session on cyber security: Prevention / Preparedness / Incident Management

• 2017 BIIA Biennial Conference: Panel discussion on cyber security – key issues

• 2018 BIIA to intensify the monitoring of Cyber Security Risk

22

39

74

98 103

2013 2014 2015 2016 2017

Total Articles on Cyber Security 358

http://www.cybersecurityintelligence.com/

21

Cyber Security Locked in an Arms Race


22

Cyber Security Magnitude of Data Breaches

18,556

19,800

20,955

21,045

21,300

21,663

21,750

22,490

24,211

25,802

28,512

33,125

33,167

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

AU

SA

IT

AS

JP

UK

CA

DE

FR

BZ

US

ME

ID

Average size of data breach 2017

The average number of breached records by country or region

Global average = 24,089

Source: IBM / Ponemon Study


23

Cyber Security Average Cost per Data Breach

1.52

1.68

1.92

2.29

2.53

2.80

3.10

3.47

3.51

3.68

4.31

4.94

7.35

1.70

1.53

2.39

2.29

2.20

2.87

3.55

2.95

4.19

4.58

4.56

4.12

6.69

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00

BZ

ID

AU

AS*

SA*

IT

UK

JP

FR

DE

CA*

ME

US

4-year average FY 2017

The average total cost of a data breach

compared to the four-year average

Grand average for FY2017=$3.62,

FY2016=$4.00, FY2015=$3.79,

FY2014=$3.50 (cost in millions)



24

Cyber Security Per Capita Cost

$71

$101

$119

$123

$124

$131

$132

$137

$149

$150

$154

$165

$188

$200

$223

$245

$380

$80

$114

$128

$123

$129

$139

$140

$155

$168

$149

$144

$207

$260

$178

$222

$369

$0 $50 $100 $150 $200 $250 $300 $350 $400

Public sector

Research

Media

Transportation

Hospitality

Entertainment*

Consumer

Energy

Industrial

Communications

Retail

Technology

Life science

Education

Services

Financial

Health

4-year average (US$) FY 2017 (US$)

Per capita cost by industry

classification



25

Cyber Security Current Trends / Takeaways

1. Undeniably now a strategic risk

2. Ranks high on scale of business risks

3. Expect escalation of attacks – insider risk underinvested

4. Cyber Risk Score (Preparedness) may become as

important as a Credit Rating (FICO) (Moody’s)

5. Run on Cyber Insurance

6. Run on talent - 2018 compensation to increase by 8%

7. Enterprise average cost in 2017: US$6.69 – US$7.35mil

– cost varies by country and industry (USA)

8. Enterprise Cost for Equifax in 2017 was US$ 164 mil (net

US$114 after insurance)

9. Economic Cost - Exceeding US$1trillion

10.Regulators - Spotlight widens becoming more complex


26

Fraud Prevention

• Online fraud now considered to be the most common

criminal offence in many countries

• Increasing cross-over with cyber crime, financial fraud

and identity theft

• Online crime wave hits consumers, financial services

and businesses alike

• Consumers and SMEs need education and help

• Identity is critical in preventing fraud

• Fraudulent synthetic identities are on the rise

Current Trends / Takeaways

Identity Theft Prevention


27

Fraud Prevention

• Machine learning and AI to speed fraud detection

• Credit information Industry and its clients make

significant investments in fraud prevention technology

• Equifax said it had launched 55 new products in 2017

• Companies with leading edge applications of Analytics /

AI are more competitive , grow faster and are rewarded

with a higher valuation (revenue multiplier) (S&P)

• Acquisitions and partnerships are used as fast track

methods to acquire analytics capabilities, platforms,

products and talent

Current Trends / Takeaways

Analytics/AI Identity


• Analytics / AI service are leading

28

Fraud Prevention Platforms / Analytics / AI

BIIA analysis of 900 company announcements in 2017

29

Current Trends / TakeawaysDigitization

• Digitization has become a reality

• Solutions vs Products

• Welcome to Robot Land – Automation in Credit Granting

• Farewell to the credit manager – perhaps not quite as yet

• Growth opportunities par excellence

• Cyber crime has raised the strategic risk

• Resource allocations shift to balance opportunity and risk

• Welcome Chief Information Security Officer (CISO)

• Welcome Chief Risk Officer (CRO)

• Not ready for digitization? You better get used to it …


30

Digitization From Credit Reporting to Risk Management

Credit Infrastructure

Capital Markets Bank and Trade Credit Consumer Credit

InformationCommercial Credit

Information

Consumer Credit

Information

Large Medium Small Micro / Consumers

Type of Credit

Recipient of

Credit

Credit Rating

Indices


Large Medium Small Micro / ConsumersRecipient of

Credit

Risk Management

Solutions

Risk Management

Solutions



InformationData & Analytics Data & Analytics

Type of Credit

Credit Rating

Analytics

31

Digitization From Credit Reporting to Risk Management



Talent

Large Medium Small Micro / Consumers

Type of Credit

Recipient of

Credit

AnalystRating Committee

UnderwriterLoan Officer

Credit Manager

Loan Officer

32

Digitization What happened to yesterday’s users?



Large Medium

Talent

Small Micro / Consumers

Analytics / AI

Type of Credit

Recipient of

Credit

Automated Systems

Analytics / AI

Analytics / AI

Data Scientists

Robots

33

Welcome to Robot Land – Today’s UsersDigitization


The Impact of Technology on Employment

Capital Markets Bank and Trade Credit Consumer CreditType of Credit

0.015 0.03 0.0350.08

0.22

0.38

0.61

0.66

0.76

0.86

0.940.97 0.98 0.98 0.98 0.99

0.00

0.20

0.40

0.60

0.80

1.00

Probability (0 Low – 1.0 High)of Professional Functions Being Replaced

by Computerization

Source: “THE FUTURE OF EMPLOYMENT:

HOW SUSCEPTIBLE ARE JOBS TO

COMPUTERISATION?∗Carl Benedikt Frey† and Michael A.

Osborne‡

September 17, 2013”

Insurance

Underwriters

Loan Officers

Credit

Analysts

Credit

Authorizers

Statistical

Assistants

Statisticians

Compliance

Officer

34

Digitization


Source: The 2016 Global Data Management Benchmark Report by Experian

0 20 40 60

Compliance Officers

Customer Focused DataRoles

Data Protection Officers

Analysts

Chief Data Officers

All Respondents C-level Respondents

Percent of Respondents

Top Data Related Roles U.S. Organization’s Plan to Hire in 2017 Vs Today

35

Digitization

The Rise

of the

Risk

ManagerWelcome

To CISO

Chief

Information

Security Officer


Source: The 2016 Global Data Management Benchmark Report by Experian

36

Current Trends / TakeawaysCompliance

• Banks are forced to become serious about compliance

• AML / Beneficial Ownership / KYC

• Businesses have additional issues:

• Supply Chain problems with slave labor, child labor,

environmental issues

• Escalating costs

• Lack of information – it is all about identity

• Inefficient compliance leads to:

• Customer dissatisfaction – loss of customers

• Potential erroneous flagging as high risk


The Collapse of the Supply Chain: Impact on Information?American Online Retailing Growing Rapidly (% of Core Retail Sales)

37

E-Commerce Current Trends / Takeaways


External Information

E-commerce and the Collapse of the Supply

Chain: Impact on Information?

Raw Mat. Manufact. Distribution Wholesaler Retailer Consumer

E-commerce

FSFS

FS

38

E-Commerce


Hello Disrupters: Fintech More Competition?

Large Medium Small Micro

FINTECH

Alternative Data Sources

Consumer



The Definition Conundrum Technology

Provider

Technology and

Lending

Licensed &

Regulated Bank

Data & Analytics

39

Fintech




Hello Disrupters: Blockchain

Smart

Contracts

Food

Safety

Financial

Transactions

Issuance

of Shares

Company

Registrations

Trade

Transactions

40

Blockchain


• From early beginnings too much hype and empty promises

• Great Expectations – Great disappointments

• 2018: More empty announcements expected

• Don’t use Blockchain until you need one!

41

Blockchain Current Trends / Takeaways

Blockchain concept in

decline on the Gartner

Hype Cycle Chart


42

Blockchain Current Trends / Takeaways

• Concentration of Proof of Concepts and Beta Projects

Land Registry

Exchange Settlements

Food Fraud

Identiy Protection

Cross Border Payments

KYC Applicatiojns

Lending Platforms / Micro / SME

Central Bank Cross Border Settlements

Supply Chain and Trade Finance Solutions

Source: Sample of Intensity of Concepts Observed by BIIA 2016 / 2017 Based on 161 Company Announcements


• Specific developments in Europe impacting the credit reporting

industry

• Access to Credit in the Digital Data World

• Regulatory approach to innovation

• Sharing of Credit Data on SMEs – the UK example

43

Regulatory

Specific developments in Europe

impacting the credit reporting industry


Key Policy drivers

Financial stability Growth

Citizens Rights


Specific developments impacting the credit reporting

industry

• Financial stability/financial reform

Consumer Credit Directive (CCD)

Mortgage Credit Directive (MCD)

Anti-money laundering

Over indebtedness and assessment of affordability

Capital Requirements Directive – fourth edition (CRD IV)

ECB and Anacredit


Specific developments impacting the credit reporting industry

• Growth

Capital Markets Union – SMEs

Payments Accounts Directive – access to bank accounts

Payment Services Directive

Retail Financial Services Green paper

Digital Single Market

FinTech

Big Data

Crowdfunding


Specific regulatory developments impacting credit

reporting

• Citizens Rights

Data Protection Regulation

To be implemented by 25th May 2018

Key areas of change that could impact credit reporting

• Consent

• Legitimate interest

• Data portability

• Right to be forgotten

• Profiling

US – EU ‘Privacy Shield’

– The new ‘Safe Habor’


Access to Credit in the Digital Data

World(Disrupting the Credit eco-system)


Factors enabling disruption

The ‘explosion’ of digital data

New data

Social media

Greater access to existing data resources

APIs, Open Data programme, ‘blockchain’

Transactional/behavioural data in e-trading and e-payment platforms

New approaches to lending (the so called ‘dis-intermediation of banking’)

Crowdfunding/P2P

New lenders leveraging their detailed relationship and ‘trusted’ brand

status with the consumer/small business (customer centric)

E commerce merchants

E payment service providers

Social media/communication channels

Big Data analytic platforms

Ability to go beyond the traditional data provided by CRAs, unlocking the

broader insights available through digital data (Big data is no longer

regarded as ‘unstructured’)

The Credit eco-system is changing

50

socialmedialandscape 2.PNG

socialmedialandscape 2.PNG

What is driving the growth of the new eco-system?

The ‘Millennials’ (Generation ‘Y’)

Tec savvy and connected – super users of new technology and social media

Growing purchasing power

Less established credit histories

Different attitude to banking facilities

Recent study showed more than 50% of them don’t think their bank offers

anything different than other banks and many expect more innovation and

banking solutions from the technology sector

Credit trends require a fresh approach

Temporarily impaired credit as a result of the recession - alternative data points

can be more effective in identifying one-time versus recurring credit issues and

provide more insight into consumer behavior.

New services offer better rates and faster service

Driven by lower operating costs, enhanced information and use of online

technology.

The Credit eco-system is changing



World

Consumers/SMEs CRAs

E commerce merchants

Banks/Lenders

Social Media

The current eco-system

ASPSP



World

Consumers/SMEs

CRAs

E commerce MerchantSocial Media

PISPs and ASIPs

Banks

Finance Company

CRA

Finance Company

Finance Company

P2P Lenders

CRA

P2P Lenders

Data analytic

platforms

Data analytic

platforms

Data analytic

platforms

Lenders

PISP/ASIP

PISP/ASIP

API

API

API

The new eco-system


Access to Credit in the Digital Data World

The potential impact of the disruption on lenders


The potential impact of the disruption on lenders and

traditional CRAs and how can they respond?

CRAs

Pressure will continue to open up the data – will this cause

a rethink of the traditional model – ‘facilitator’ rather than

‘owner’?

Look to enhance existing data with new social media and

transactional data sources to avoid minimalisation of role

Develop analytical skills that understand the new data

Real time, dynamic databases will be critical

Invest in the new platforms or become part of one of them?

Access to Credit in the Digital Data World


Regulatory approaches to

innovation: European experiences


EU Policy and regulatory priorities

• Data protection and data-related policy initiatives

data as a core asset in the new economy, need for a new policy approach

The new EU General Data Protection Regulation

o Profiling

o Lawfulness of data processing (consent, legitimate interest)

o Right to be forgotten/right to object

o Accountability principle

• Digitalisation and Innovation

EU Digital Single Market Strategy

New E-Privacy Regulation

• Revamping of EU financial services regulation

as response to the recent financial crisis but also to adapt to market developments

and digital world (40 + major legislative and policy initiatives on the financial sector

in 2009-2017)


EU Policy initiatives

• A whole range of EU initiatives focused on innovation in the digital data

world

• Common themes: recognition of the potential of the use of data to bring significant improvements to

the credit and financial markets: financial inclusion (alternative data), access to

credit, risk management and preventing over-indebtedness, fraud prevention

highlighting of risks related to the expanding use of data in the digital world (risk of

financial exclusion of certain groups, privacy breaches, questions around the use of

social media data).

• The EU policy approach to these issues is still being developed

58

• FinTech identified as a priority by the EU Commission in 2016 recognition of FinTech as a potential contributor to growth, financial inclusion and

other benefits for consumer, increased competition

• Special FinTech Task Force at the EU Commission (cross-department) no specific output (e.g. policy or legislative proposal) has been committed to

rather monitoring of developments, early thinking

• EU Action Plan Launched this month.

• Credit Reporting industry response: Fintech is a significant opportunity for companies (old and new) and consumers

Need for the right regulatory framework to encourage innovation

Regulatory level playing field between established and new players, EU and non-

EU players

EU Work on FinTech


• UK – FCA Innovation Hub including the “Regulatory Sandbox“

• France – AMF "Regulatory Soundbox"

National Work on FinTech

https://www.youtube.com/watch?v=YUb3dc90y_g&index=3&list=PL6Bvf2KRQCCcXVQmjKrAXGRfzdxRP3tE_


https://www.youtube.com/watch?v=YUb3dc90y_g&index=3&list=PL6Bvf2KRQCCcXVQmjKrAXGRfzdxRP3tE_

Sharing of Credit Data on SMEs

– the UK example


Policy Objectives

• Increase competition in the SME credit market by lowering barriers

to entry providing SMEs with a wider choice beyond their existing

credit provider leading to an increased availability of credit

– Achieved by improving the availability of SME credit data amongst

lenders to reduce information asymmetries and enable newer lenders to

better differentiate high and low risk borrowers, removing a barrier to

entry for newer credit providers

– Improved access to SME credit data will improve SME credit scoring and

therefore the availability and price of credit for SMEs, particularly for

smaller and newer businesses which have no credit footprint


The Regulation

• Designated Banks to provide credit information about their SME customers

to designated CRAs

• Designated CRAs to provide this credit information to other finance

providers for the following purposes:

– credit assessment

– debt collection

– complying with its statutory or other legal obligations relating to the provision of

the credit (AML. KYC etc.)

• Supply of information by the Banks and by the CRAs requires agreement of

the SME customer

• Under the Regulation a business is an SME business if:

– It has annual turnover of less than £25million

– It carries our commercial activities

– It does not carry out regulated activities as its principle activity, and

– It is not owned or controlled by a public authority


The Regulation

• Credit information to be shared

– Information relating to:

• loans

• credit cards

• current accounts

• business type indicator (e.g. limited liability company or non-limited

business);

• business name and address

• company registration number (if applicable)

• telephone number

• VAT number (if applicable)

– The finance provider receiving the credit information is required to agree

reciprocally to provide credit information that it holds about its SME

customers to the designated CRA within 12months of accessing the

information from the Banks.



10 Key Trends Keeping Information Executives Awake

65

Fintech

Blockchain

E-Commerce

RegulatoryP

R

E

P

A

R

ECompliance

Fraud Prevention

Cyber Security

Identity

Analytics/AI

Digitization

I

N

V

E

S

T

Fight over Resource

Allocation

LATE BREAKING NEWS BY CATEGORIES

Analytics/AI Blockchain Business Information Compliance

Cyber Security Credit Bureau News Data Digitization

E-Commerce Financial Inclusion Fintech Fraud

Identity Privacy Regulatory News Technology

For Information, Insight and

Vision on the Information

Industry

Visit

www.biia.com

Thank You

For further information about joining please contact any member of the BIIA

executive committee:

Joachim C Bartels, Managing Director: e-mail [email protected]

Neil Munroe, Deputy Managing Director: E-mail [email protected]

Peter Sheerin, Member of the Executive Committee: E-mail:

[email protected]

or consult our website: How to become a member

February 2018

mailto:[email protected]



https://www.biia.com/about-biia/about-our-industry/how-to-become-a-biia-member

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