Bridging the gap between data pricing, quality, and accuracy

With cost savings high on the agenda for risk professionals, and some bureaux announcing the withdrawal of products and services, it’s now even more important for our clients to bridge the gap between data pricing, quality and accuracy. But with so much variation in how data providers set prices, how can you gain complete transparency, get access to the right data, and save money?

Pre-COVID, we saw significant strides being made by many risk professionals to optimise costs – with Santander announcing it was on target to achieve cost savings of €1 billion this year. But the pandemic has now shifted the game and significantly raised the requirement. Earlier this week, Santander announced it’s drawn up plans to achieve an additional €1 billion in savings by 2022. With others sure to follow suit.

In short, banks and other credit providers’ top line revenues are looking challenged. This makes it more imperative than ever to bring costs down.

Data pricing transparency

Even though the data bureaux have been around for some time now, variations in data pricing, accuracy, and quality are still widely misunderstood. We frequently find that clients pay different prices for the same data. With prices (per search) often varying by up to 1,500%.  

That’s why price transparency is a topic that comes up frequently in our discussions with clients. Some companies don’t publish prices because there isn’t a set price. The price changes based on the project, the client, or the suppliers view of the complexity and cost of change. Leaving clients not knowing if the price they’re being offered is what another firm paid for the same data.

We often find that a huge gap remains when you don’t have a clear benchmark of what other businesses are paying. Yet data benchmarking takes away that air of mystery. You don’t need to worry about whether you’re being fairly charged. You can clearly see how your price stacks up against what other companies are paying.

Access to quality data

While data and transparency have been key themes in the credit risk market for some time now, they came into sharp focus this week. The UK’s information commissioner ruled that Experian has been sharing the personal information of millions of people without consent and must stop. Equifax and TransUnion, who have also been under investigation, are not facing further action from the watchdog, because both made changes, including withdrawing some products and services.

This withdrawal of products and services from the market could leave some businesses without the quality or level of data needed. But with expert assistance, you can gain access to a wider breadth of global data providers with the additional benefit of complete transparency on price and quality.

As credit professionals build this broader and richer view of sources, understanding the dynamics and nuances of different providers will be fundamental. The good news is that while challenges persist, awareness is increasing, and progress is being made.

Impartial and unbiased, we have worked with a wide range of customers and suppliers and aided the negotiation of hundreds of agreements. By overcoming many of the pitfalls that credit professionals and purchasing managers have had to face, we ensure relationships are underpinned by clear mutual benefit on both sides.

 Bridging the gap

Credit risk functions are at a crossroads. As the trends of rising costs and constrained revenue growth are set to continue, they must find new ways to decrease costs. Actions taken now to optimise costs and enhance the quality and accuracy of data will help shape the ability to achieve high performance in the future.

Although many businesses work toward achieving cost saving initiatives from within, the expertise of an external partner can bridge the gap between data pricing, quality and accuracy and open up the door to even greater savings and transparency.