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Equifax Inc is a consumer credit reporting agency in the United States. It is the third largest American credit agencies in the world. The top positions help by Experian and TransUnion. Equifax was founded in 1899. It is oldest of the three agencies and gathers and maintains information on over 400 million credit holders worldwide. It is a global service provider based in Atlanta, Georgia with US $1.5 billion in annual revenue and 7000 + employees in 14 countries. It has been listed on NYSE.
Equifax Inc, a player in financial information services, got the go ahead from RBI on 26th March 2010 to establish a credit company under "The Credit Information Companies (Regulations) Act 2005 (CIC Act)". It is a joint venture between Equifax Inc. USA and six leading Indian financial institutions - Bank of Baroda, Bank of India, Kotak Mahindra Prime Limited, Religare Finvest Limited, Sundaram Finance Limited and Union Bank of India. The JV here aims to provide a broad range of solutions related to credit information, business analytics and risk management for our clients, across India.
The information from the members are collected , processed into a readable form such that it can be used to provide credit information reports and other related products on individual consumers for a variety of uses within the purview of the CIC Act. In addition to the identification information, information on an individual's borrowing and bill paying habits are also provided which helps lenders to assess the credit worthiness of their borrowers and in judging the ability of an individual to payback a loan if granted.http://www.cibil.com/sites/default/files/mechanism.png
Importance of such a service
The services provided will help the institutions to manage risk efficiently. The unique insights delivered will help lending institutions make better business and credit decisions. What Equifax brings to table is a team of experts and leaders from Banking and Financial services and a global expertise of being in this domain since 1989.
Earlier India had just one credit bureau for proving credit history to individuals - CIBIL since 2000. Equifax has entered into India as the second credit bureau followed by Experian Credit Information, Highmark Credit Information.
Why the choice of the service Products?
The emergence of India as a major influence in global commerce and India's own internal growth would pave a need for world class customer insights and risk management systems. The RBI has made some concrete moves in widening the field of credit bureaus by issuing licenses to three new credit bureaus, which have been steadily building their presence in India amid the burgeoning number of Indians who use financial products. Such services firms will help in improving the lending decision making process.
Also such services are needed to keep track the credit history of the borrowers. Currently the system is such that borrowers who seek loan are loaned out at the same interest rates irrespective of their payment record and financial history, which is unfair to those who are diligent with their payments. As the financial markets grow and more regulations coming out it will become more and more difficult to consumers to borrow unless they have a sound credit history across a range of products. Hence the relevance of such firms which track the history of the individual customers by providing a rating.
Description of Service Innovation
The main objective of the firm is to identify the right customer for the lender. Constant challenges from complying with new government regulations to acquiring and managing customers are faced by lender. Equinox helps the lender in identifying the right customer .It also helps the borrower to access the information held in the database to review his / her credit history.
Consumer credit files from all regions across India with the history of repayment on the consumer across his/her various loans and credit cards.
Freshness of data, with data being updated on a regular basis from our member institutions.
Operated using advanced search techniques and matching logic, which aggregates all information about the consumer across his /her various loans and cards with our member institutions.
Managed in our world class technology and operations platform.
Better lending decisions led by a "world-view" of the borrowers track record.
Reduced credit risk with access to the consumer's trade and inquiry information over a period of time.
Improved identification of the consumer with access to ID information as available with other Equifax members.
Robust tracking of credit performance of the portfolio on a regular basis.
Consumer Information Reports (CIR)
Equifax maintains a highly useable and readable credit report for the extensive consumer base across members which cover all regions in India. These reports give a complete view of the borrower. The sections of the report include: - Identification and contact section, Credit Summary, Recent Activity, Account Details Section, Recent Activity, Inquiries section - which covers the details of the borrower.
This service alerts the client on the credit active customers in your portfolio who have demonstrated a possible need or desire for additional credit. Such an alert can bring your attention to customers in your portfolio that are seeking credit and therefore helps you in monitoring their behavior proactively.
Equifax Portfolio Review
This solution helps in taking both positive and negative action to assure profit and generate revenue. The unique features of the product are:
The portfolio review product may be provided in conjunction with Alerts - this is the only Portfolio Review product in the market with this capability. Alerts may be triggered and then a portfolio review may be run on those specific accounts.
More than 200 attributes can be delivered with a unique attribute packaging
All Attributes Review :-Provides an overall view of the individual's credit profile, Focuses on overall credit usage and utilization, Tracks all delinquencies reported on file
Credit Card Review :- Contains attributes specific to credit card trade lines
Secured Installment Review :- Contains attributes specific to secured installment trade lines
Unsecured Installment Review :- Contains attributes specific to unsecured installment trade lines
Score Review :- Provides the Equifax Risk Score along with a few key attributes
Equifax Risk Score
The Equifax risk score has been developed to leverage the most recent data from its members. The market risk level score is designed to predict the likelihood that a customer will default in next 12 months.
The unique features of the product are:
Developed specifically for the Indian market, using Indian data, incorporating local market knowledge
Developed using data from major market players
Designed to score consumers for evaluating his/her market level risk
Can score no-hits and inquiry-only files.
Designed to work with any standard product type
Definitions consistent with international standards
Both CIBIL and Equifax provide the same kind of data to individuals. But Equifax has differentiated itself in two ways:-
Better representation of data as compared to CIBIL. Data is represented using graphs to make it more user friendly for the individuals to understand.
Equifax offers this service to everyone. This implies anyone can apply to get his credit score whether he has a credit history or not unlike CIBIL whose scores only those individuals who have some kind of credit history in the past.
Use of service marketing elements
Product: The product offering has been already stated above with the different kind of reports like Consumer Information Reports, Equifax Alerts, Equifax portfolio review et al
Price: The price can be compared to the existing competitor in this case CIBIL. Depending on the product differentiation a premium price can be charged.
For an Equifax Credit Information Report without your Equifax Risk Score, make a payment of Rs. 138/- (inclusive of handling charges & taxes) through Demand Draft
For a Equifax Credit Information Report with your Equifax Risk Score, make a payment of Rs. 400/- (inclusive of handling charges & taxes) through Demand Draft
For a 12 month subscription of your Equifax Credit Information Report with your Equifax Risk Score, make a payment of Rs. 1000/- (inclusive of handling charges & taxes) through Demand Draft and your report will be delivered to you every 3 months (4 times in the next 12 month period)
Place: Services being intangible cannot be stored, transported or inventoried. The dominant channel is through intermediaries or agents or these days directly through the internet. The company has to work with its customers in understanding their needs and deliver the reports at the customer location or in its own meeting rooms. These days the reports can be delivered through the internet in case of standardized reports.
Promotion: Consumer would prefer more personal information since it being in the services business. Hence it is important to develop a personal relationship with the prospective customer by helping him with his queries.
People: The firm thrives on its analysts who are the brains behind the reports and analysis generated by the firm. They are the ones who interact with customers on specific requirements of the clients. Hence People is one of the most important aspects of this business.
Physical Evidence: It refers to the physical environment, facilities and the atmosphere. In case of Equifax most clients might visit the office to or might get in touch through online medium to access reports. Hence providing a decent welcome is necessary so that the customer gets the right impression about the firm.
Process: It refers to the availability of the services and their consistent quality which is an important criterion in case of a firm like Equifax which is into the financial services business where in the quality of the reports generated by the firm is used in major decision making process of the customer.
One major takeaway would be how a service firm like Equifax has been able to differentiate itself by entering market which already had a major player CIBIL in the market for the past 10 years. It has been able to bring in the global expertise as well as the brand name together in servicing the Indian customers. Also it has brought in unique propositions like credit rating reports for people who don't even have a credit history.
In making the report another worthwhile aspect to note was that how the Government has protected this area of business till now and helped it to mature before letting in the competition to enter. The letting in of competition brought in new features as well as gave options to customers to choose from and get a better service at any day. Also with the markets maturing the availability of more than one source giving their independent rating is always appreciated.