Follow on Google News
Source: ANFAC magazine | By Elias Sfeir, president of the National Association of Credit Bureaus (ANBC).
The importance of credit for economic development and the promotion of social welfare is undeniable. And it has been advancing internally in recent years due to the improvement of the microeconomic agenda, which has improved the segment and innovated financial services, added to two relevant factors with enormous transformational potential: the use of technology and changes in behavior.
In order to understand how innovation has taken place in the credit market, it's important to point out that at the center and as a facilitator of the relationship between lenders and borrowers are the credit bureaus, carrying out an essential activity. The segment, which was initially known for delivering products using the database of negative credit ratings, has been transformed.
With the increased availability of data on credit With the evolution of information systems and regulatory advances, bureaus have started to create increasingly sophisticated models for predicting credit behavior.
From 2019 onwards, with the arrival of the Positive Registry with automatic entry of people and companies, delinquency data has brought an extra layer of information to the bureaus managing the databases, opening up space for the creation of a history of payment behavior, capable of providing fairer conditions when contracting credit. Currently, according to data from the sector, around 150 million individuals and companies are already part of the bank's database. Positive registration and can benefit from this measure. In addition to the Positive Register, other databases, such as the SCR, have been helping the sector to evolve.
All this transformation in the volume of data has required the bureau sector to invest in analytics tools, adding statistical modeling, computing power and business knowledge. In this way, data is constantly being transformed into inputs for better decision-making and credit risk analysis.
This is just one recent example of how the sector, throughout its history, has incorporated the technological frontier into its operations, always with the aim of reducing information asymmetry and, at the same time, helping consumers and companies to practice financial control, encouraging conscious consumption and sustainable credit.
Every transformation in the branch sector has occurred simultaneously with the transformation of society and its way of dealing with technology. At the same time, other factors have driven innovations in the credit market and, consequently, in the credit card industry. bureaus. The first example, and for me the most important, is the Central Bank's work focused on technological developments in the financial system to stimulate inclusion, competitiveness, sustainability and transparency. High-impact innovations have been launched onto the market, changing the way we pay, receive, invest and transfer financial resources.
PIX, the instant payment system created by the Central Bank of Brazil, has broken successive records since it went live in November 2020. In addition to the usual transfers and payments, the PIX Garantido, planned by the Central Bank, will also make it possible to make scheduled and installment payments, functioning as a form of credit and being an alternative to traditional cards.
We can also highlight peer-to-peer lending platforms, which allow individuals to lend funds over the internet to small businesses, capitalizing on credit. And, following a trend in retail, the emergence of "marketplace" also favors the borrower by stimulating competition in the financial system and enabling consumers to make more informed decisions by comparing different offers.
At the same time, Open Banking, which, with the customer's consent, makes it possible to share information between financial institutions, the Electronic Duplicate, created to make it more efficient to offer credit by anticipating receivables, and the advance of Real Digital ensure that digitalization, which limits transaction costs and encourages competition, will continue to foster innovative solutions for the entire financial and credit ecosystem.
Another technology that is advancing is artificial intelligence which, in the credit bureau sector, is already showing benefits such as greater precision in products, financial inclusion and increased efficiency in the credit granting process.
This is because innovation is the vector that has broken down barriers to entry and allowed new players to emerge in the credit and financial services market.
In a context of the growing importance of the environmental agenda and the new analysis criteria that are guiding the allocation of resources in both the credit and capital markets, technological and behavioral changes will continue to positively drive the credit market.
With all these innovations, the benefits are expected to reach both lenders and borrowers as they increase competition and foster a continuous process of financial education.
In the face of technological advances, there are challenges to bringing these services to market, such as the availability of internet, access to smartphones and digital education in the use of devices, after all we have generations of people with varying degrees of digital education.
Attentive and active in the face of this scenario, credit bureaus continue to advance towards transparency in the relationship between lender and borrower, thus encouraging healthy, conscious and sustainable credit relationships.
