By LYDIA NATHAN / Pic By MUHD AMIN NAHARUL
Credit reporting agency CTOS Data Systems Sdn Bhd said the growing trend in the country’s data analytics is identification or authentication of a company.
Its chief product and marketing officer Keith Wardell said more institutions are eager to know who they are dealing with and how can the processes be sped up.
“When making a credit lending decision, institutions want to be able to access the most current or up-todate information,” Wardell said.
He said of all the different types of available data, the most vital would be payment data.
“When deciding a credit rating or how much an SME (small and medium enterprise) should receive, it is important to look at their payment data previously. Do they pay on time or is the company authentic? Those are questions institutions should ask,” Wardell said.
According to Wardell, a study done by Forrester Research showed that financial institutions, banks and telecommunication companies want a more cost-effective way of doing things and are constrained in acquiring new SMEs as customers.
“This could be because of manual decisions, limited resources and budgets. The study showed that 60% of organisations saw value in automating processes in SMEs,” he said at the CTOS Insight Conference in Kuala Lumpur yesterday.
He added that manual processes have the ability to create errors, which will lead to unhappy customers. “Everything is on demand now. For instance, SMEs want to know quickly if credit lending has been approved, so they can make important decisions,” he said.
Wardell said this is why CTOS will launch its new solution — CTOS application and decisioning in September — as it is aimed to give an instant credit recommendation and lending decision.
“We have listened to the needs of the market, especially to those with limited resources. The key here is that the solution can capture the application data, which can be used to process the data.” Wardell said that its market partner has already tested out a similar solution in Australia and New Zealand.
Meanwhile, Wardell said, that added that there have been some significant challenges in providing credit to SMEs, such as ensuring financial statements are updated.
“We’ve seen growing trends in the use of technology in gathering information directly from SMEs. So, they are no longer using financial statements, instead, we ask them to connect to the accounting software and the information is automatically extracted. Lots of global companies are doing this these days,” he said.
Wardell added that SMEs must also show an act of trading history, to prove the business is active.
“Institutions will want to see how dependent they are, where their revenue is coming from. Fraud can come in many guises,” Wardell said.