Credit bureaus today are one of the key enablers of the changes taking place in the lending space and financial services sector as a whole. CRIF High Mark, one of the leading credit bureaus in the country, deals with massive amounts of customer data. How does the firm make this data available to creditors on a near real-time basis? How does technology help them in this process?
Pinkesh P Ambavat, CTO & CISO of CRIF High Mark, shares more insights on increasing use of credit bureaus for credit scores in India, challenges faced by credit bureaus and implementation of latest technologies has helped in providing better performance and uptime to its customers.
Q. Credit bureaus have been in India for over a decade and they have come a long way since then. What are your views on the growth of such bureaus in India?
A: In the last few years, the use of credit bureaus and credit score has become more prevalent. The credit bureau industry has been growing at over 30 percent CAGR Y-o-Y. It’s pleasing to note that CRIF High Mark is outpacing market growth as we continue to increase our market share.
Lenders are now more inclined to work with more than one credit bureau to leverage each other’s strengths. Further, credit bureaus offer value added services such as predictive analytics solutions, benchmarking analysis, monitoring solutions which support lenders such as banks, NBFCs, MFIs etc., and insurance & telecom companies in understanding and engaging their customer better.
Q. What challenges do you think credit bureaus face these days? How are emerging technologies like blockchain, automation helping address these challenges?
A: There are two key technical challenges for a credit bureau. First is to ensure data in the credit bureau is as fresh/current as possible. Millions of updates from several thousands of institutions make way into a credit bureau’s database every day. Lenders are now moving to sharing updates with credit bureaus from monthly cycles to weekly and some even on daily cycles, thereby significantly increasing the frequency of such updates. Automation is key to ensure that updates are not missed and processed in time with minimal or no manual intervention. We continuously look for opportunities to improve process efficiency.
Second is meeting expectations of response time for fetching credit data and credit score in the digital era. Our users need systems which are not only very fast but very scalable to meet unexpected surges in demand. Solution such as Oracle Exadata Cloud at Customer is enabling us to address such expectations.
Blockchain is quite promising. It can certainly make the data more secure and also make the most current/fresh data instantly available to all - however, we believe it’ll take some time before practical implementation and mainstream adoption in our industry.
Q. What mechanism have you put in place to make sure that you provide credible and near real time assessments to your customers?
A: This requires a synergised approach across applications, data management and technical infrastructure. The focus for applications team is on accuracy of output we provide. The focus for data management is recency and availability. We constantly search for improvement areas and invest in them to get the best value. We have automated many of our operational processes to reduce manual intervention and fast-track response time. We are experimenting with RPA and Chatbots as well to further empower operations and services. We have segregated our processes to optimally leverage Oracle Exadata Cloud at Customer and Big Data. Big Data enables us with very cost-effective high-volume offline processing. With the help of Oracle Exadata Cloud at Customer, we have been able to update our databases faster and also process many more real-time credit score inquiry transactions with an improved response time.
Q. What shall be your business strategy to grow in this sector? Where does technology stand in your growth plans?
A: Our business is very technology driven. Data is central to a credit bureau, and we leverage that to enable our clients with insights, with analytics and thereby with decisions. Clients prefer end-to-end solutions which combine data, analytics and automation to give them a head-start in their business. We are already investing very heavily in analytics and machine learning so that we can extract more value for our clients from the data we have in the bureau. We aspire to create more and more plug and play solutions addressing specific unmet needs for our customers.
Q. What are the challenges that you were facing before implementation of Oracle Exadata Cloud at Customer? Can you also please share the business benefits after use?
A: The major challenge had been around flexibility to increase infrastructure based on surges in volume. The credit bureaus also experience high volumes during the last week of every month - especially quarter and year ends, and also during the festive seasons. It is very difficult for us to predict the cumulative surge in volumes from thousands of our customers. Despite our proactive planning, on occasions, such surges impacted the transaction response time and therefore had a bearing on the SLAs we had committed to our customers.
With Oracle Exadata Cloud at Customer solution, we get all the advantages of an Oracle system (so there’s no mismatch from what we were using earlier) plus the flexibility to scale almost instantly. We are now able to provide much better performance and uptime to our customers. The response time to credit score inquiries is at least 2x faster even during peak times.