Top questions answered: Comparing credit risk bureaux

Choosing the right credit risk bureau can be challenging, especially with so many options available.

Each bureau has its unique features, advantages, and methodologies, which can impact your decision.

To help you, we’ve put together the most common questions about comparing credit risk bureaux so you can make an informed choice. You may have already seen some of them on our company LinkedIn account.

Here are a few of my top picks:

Q: How do you think the credit bureau market will change in the next 5 years?

A: The bureaux will need to be more transparent with pricing due to FCA focus. They will also need to be more flexible with commercial terms and price based on value.

This means no longer subjecting customers, who are confined by legacy systems, to higher pricing.

We expect more of the market to shift towards a multi-bureau and multi-data supplier approach, utilising flexible platforms.

On top of this, bureaux will likely partner with alternative and complementary data sources and systems, making their offerings more compelling.💡

Q: What advice can you give to those looking to maintain long-term bureau relationships?

A: Shorter terms with better rates are preferential to provide flexibility to react to the competitive market and keep leverage on suppliers to maintain profitable pricing.

⚠Longer terms do not necessarily mean better pricing, a common belief that should be challenged through benchmarking.

We recommend 3-year contracts over 5-year contracts.

Here’s why…

If locked into a 5-year contract, early benchmarking can signal to the supplier the intent to consider competition at renewal. This can help fix inflated pricing early.

Waiting until the renewal date leaves little time to create leverage, often resulting in renewal at increased (inflated) pricing for another 5 years. 🚫📈

Q: What trends do you expect to see in credit data?

A: We anticipate several key trends in the credit data space:

• Unified and shared data sets 📊
• Fraud prevention 🔒
• Multi-bureau strategies 🔄
• Supplemental data 🗂️
• Addressing data gaps 🕳️

➕Plus, utilising data throughout the customer journey for various products, which are currently siloed for many financial providers, will be crucial.

There will be a growing requirement for higher volume soft searches and new commercial models. This will allow for wider marketing opportunities beyond the insurance sector, which currently leads to working directly with aggregators and exploring alternative pre-qualification and scoring solutions.

Whether you're looking to understand their differences or evaluate their strengths, we've got you covered.

As always, if you have any questions, please do get in touch. N.frazer@purplepatchuk.com 📩