Key Information for worldwide business partners evaluation: data sources overview
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Obtaining reliable information on companies located all over the world is a challenge for businesses that trade every day on an international basis.?Differences in legislation, data availability, collection and updating, added to political conditions and governmental organization, require a presence and, at the same time, knowledge of data and sources to release high-quality information that helps companies in decision-making processes.?
Sources can be classified starting from data necessary to understand the profile of a company. Even though they can be different from country to country, here is a summary:
Much more complicated is the topic related to data collection as strongly linked to countries’ specificities.
First of all legislative requirements in companies’ data management: every country is different in rules are requesting companies to transmit their data to public sources. Even if a Public Institution collecting data is always available, it can assume different characteristics in each state. It can be at a national level or a local level, depending on the mood of the interaction. In some countries local institutions are obliged to transfer data to national ones, acting as unique repositories. In other countries, information remains at the local level with very few possibilities to have a unique source for data at national level.
This is linked to how a state is organized, and the level of relationship between central and local bodies. Generally speaking, more advanced countries are experiencing more structured flow and processes to provide high data availability. But it’s a general statement the kind of data companies are required to register can vary a lot also inside countries showing high data availability. A typical example is represented by financial statements: if in all countries a limited number of legal forms is required to register them, in some states only a small sub-portion of them is obliged to accomplish this requirement. A good example is represented by the US and Switzerland where the only companies obliged to register balance sheets are the ones at the Stock Exchange.?
Not only legislative rules are impacting data collection processes. Also, the level of automation and computerization, in IT infrastructures must be taken into account. A country requiring transmission of data on companies with hard copies, as able to manage them only in this way, is very different from another one following this process using state-of-the-art technologies. It means also that updating and organizational flow have different overall results. In the first case, data availability will be slow, partial, and subject to timeline variations. In the second case, the process is robust, giving a good grade of confidence in data availability and quality.
Of course, political instability, lack or poor control of the central government on the country, and internal turmoil are affecting negatively processes linked to data collection.
Internationally, data availability and updating level of a specific country are measured using as definition ‘data friction’, classified into 4 tiers as described below.
Tier 1 – Countries with good data availability and accessibility: detailed information, constant and proactive updating. In this case means that data availability is following legislation and the process of obtaining the data is electronic and in line on what occurs to the company itself.
Tier 2: Countries with a medium level of data availability, but critical in terms of accessibility and updating, which is only reactive. In this case, data are available but due to the flow in place, can show difficulties in both collecting data and consequent updating.
Tier 3: Countries with limited data availability combined with access difficulties due to the organization of public sources still in place. In this case, data can be available but fragmented in different data sources very often do not link to each other. This scenario is linked to countries that began only in the last year to put in place systems to collect data related to companies.
Tier 4: Countries with poor company data availability. Very often, nations in this group are facing situations linked to wars on civil wars still in place or stopped quite recently.
Considering the geographic area, the worldwide environment can be summarized as follows:
Sub-Saharan Africa
Africa, even if there are some differences related to countries or areas, is presenting high data friction. It means the process related to collection and updating data related to companies is in general complicated both in terms of rules related to registration, public bodies in charge, and data availability itself.
Europe
Europe, generally speaking, has a low data friction. It means processes related to collection and updating data related to companies are in general transparent both in terms of rules related to registration, public bodies in charge, and data availability itself.
Far East and Central-South Asian Countries
Far East and Central-Southern Asian Countries are a very big area including countries with different profiles but all of them with a very complicated structure in terms of data availability, updating and digitalization It means processes related to collection and updating data related to companies is in general complicated both in term of rules related to registration, public bodies in charge and data availability itself. Generally speaking, data friction can be considered as high.
Latin America
Latin America, even if there are some differences related to countries or areas, is presenting medium data friction. It means processes related to the collection and updating of data related to companies can present some difficulties in terms of rules related to registration, public bodies in charge and data availability itself.
Middle East and North Africa
Middle East and North Africa Markets, even if there are some differences related to countries, are presenting a high data friction. It means the process related to collection and updating data related to companies is in general complicated both in terms of rules related to registration, public bodies in charge and data availability itself.
North America
North America is presenting in general a low data friction. It means processes related to companies' data collection and data updating are quite easy, even if there are some specificities. The level of digitalization is maximum, and the limitation in data availability is linked to legislation and rules.
Oceania
Oceania is presenting a medium data friction. It means processes related to the collection and updating of data related to companies can present some issues mostly linked to rules and legislation. The level of digitalization is high but doesn’t affect all economic entities.
Data coming from public sources, considering of course differences from country to country, are important, as data itself, but also, and more crucial, as key components to generate information such as ratings to assess the risk level and credit limits, because to be aware of any negative event, legal data or financial data, allow to have a better awareness of when a decision must be taken.
Topics related to companies’ data and sources availability are very complex, especially in a global market, and business partners can be located everywhere in the world. This is the reason why it is necessary to have a provider able to face and sort issues related to data at the same time a strong commitment to quality, transforming public data into value-added information.
This is the SkyMinder mission: SkyMinder is the CRIF platform positioned as a hub when a company has to be evaluated in every country in the world. Considering differences between countries, the combination of CRIF companies and the best local provider perfectly matches the highest quality standard required by the markets. In Full Reports and Slim Report, even if with different levels of details, all companies registered in public sources are covered, and evaluation data like Rating and Credit Limit give the right direction when a business decision must be taken. Then, firmographic data, financial information, negative data, company structure and activity details, are composing the Report. Online availability is almost complete for CRIF countries or other partners in Western Europe with the fresh investigation process, as a result, to provide information on all companies. Based on Full Report but with synthetic content, Slim Reports include basic official and unofficial data and evaluation information like rating and credit limit.
Businesses can be affected by changes, like new financial statements, negative events, principals, or rating and credit limits, Monitoring Solutions are able to notify if a change occurs providing the right information to modify or confirm decisions previously taken.
Due to legislation’ or business requirements, it’s necessary to understand company structure, ownership and shareholding: thanks to the Verification Report, is possible to obtain this information to have an in-depth knowledge of the company itself. As a matter of overall evaluation, also financial crimes, bribery, corruption, and terrorism can assume a very high relevance when a business partner has to be evaluated, both in terms of risk management and reputation. In this case, SkyMinder has a double offering with two products, Compliance Check Report and Extended Check Report, able to verify if the company requires or shareholders and principals are connected to financial crimes.
Finally, also Cyber Risk can be underlined using KYND Cyber Risk Report in a complex evaluation process.
SkyMinder is strongly committed in providing best-in-class information everywhere in the world, considering local specificities and being able to offer high-quality information despite data friction levels.