‘Collecting data has become easier’

Experian India set up its credit information bureau operations in India three years ago. The parent company, Experian, is the largest credit information bureau in the world. About half its income comes from credit information operations, and the remaining from data analytics and marketing services, among others.

Mohan Jayaraman, Country Manager of Experian India, expresses satisfaction with the way the bureau has grown. He says it has almost achieved data parity with other credit information bureaus. These bureaus have records of over 300 million individual customers. However, more satisfying to him is the fact that membership is growing and he expects this to be a real differentiator in his business. Edited excerpts:

How has your journey been as a credit information bureau?

During the last three years, our focus has been on data acquisition. We now have roughly 1,200 member entities and this is expected to cross 1,400 to 1,500 soon. These entities include financial institutions, banks, regional rural banks, co-operative banks, finance companies, rating agencies and brokerages.

What about the issue of sharing data with non-banks? How do you reconcile the issue of reciprocity (only those who contribute information are allowed to access it) when it comes to sharing information?

The Credit Information Companies Regulation Act (CICRA) has put together two levels of membership: one which is mandated. Here, banks and financial institutions should be a member of at least one of the four credit information bureaus.

The other category is a list of designated users such as telecom companies, insurance companies, brokerages and rating agencies to whom we are allowed to provide services. Now, the list of people who give data is smaller than those who use them.

As for reciprocity, while we would prefer to have data from telecom and insurance companies to be added, the regulators have their concerns. One is the quality of data and the KYC process followed by these companies, especially the historical data. The second part is the regulatory and legislative angle. Since different regulators regulate these players, getting the right regulation in place would be complex. I believe it will happen eventually. This is directionally the way to move. It is beneficial to the consumers as well.

For instance, 300 million have access to bank products, but 700 million have access to mobile products. The difference - 400 million - can be used as a basis for creating new credit footprint and perhaps enter the financial system. It is a great tool for financial inclusion as things go forward.

Is it easier to get data now from banks and other users?

It has improved substantially in the last three years. There was a time when data would come once a quarter from many banks — and that too with a very high level of rejection. That has changed.

Banks have made changes in their practices. So, compared to three years ago, things are better.

Have banks been putting this data to good use? What trends have you observed in consumer behaviour after the introduction of your services?

India started with positive data; even developed markets started with sharing negative data. The difference is that the second involves only sharing details of delinquency. This is smaller. India started a lot more progressively. You can use this for doing a lot more things with good customers.

The average number of relationships that a customer in India has with his bank is two, while his western counterpart has six or seven. The difference is the opportunity. You can give them more. The obsession of the banking industry has been to get new customers rather than work more with their existing customers. Banks are now working with bureaus for customer management. We are starting to see a tremendous level of sophistication.

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