The CCR Advantage for Australian Credit Licence Holders

Posted by Jill Nelson on Mar 1, 2019 1:21:02 PM

CCR Advantage for ACL Holders

Banks and credit providers in Australia are paving the way for comprehensive credit reporting after the federal government’s move to introduce mandatory data sharing was announced in 2017.

While small credit providers, which hold an Australian Credit Licence, were not mandated to participate in CCR, they are increasingly adopting it. The reason: To utilise the extensive data, made available by the big banks and other credit providers to make better credit decisions.

CCR’s solution for limitations of internal data

Many businesses rely heavily on their own accumulated data as the primary source of information. Sourced by accumulating customer data over the course of a business relationship or commissioned market research, it can come at great cost.

For credit providers who leverage the opportunity CCR presents market reach expands significantly.

With access to greater data resources, internal records are no longer sufficient to make the informed decisions required to keep your business competitive.

As CCR participation becomes commonplace, access to the comprehensive dataset will be industry standard. Participating means your business will gain the insight available from this extensive data set.

The Principles of Reciprocity and Data Exchange

The Principles of Reciprocity and Data Exchange (PRDE) are a set of rules laid out by the Australian Retail Credit Association. After extensive consultation with the big banks, smaller lenders and interested parties, the PRDE was set up to outline the requirements each lender needs to fulfill in order to receive the benefits of CCR data.

For lenders to gain access to the extensive dataset you must be a signatory of the PRDE and adhere to its six principles. Alternatively, non-signatories can still upload their data and are entitled to the CCR data of other non-signatories. 

An example of this is where one of the big four banks, who are signatories to the PRDE, have access to all of the CCR data of both signatories and non-signatories.

A small mutual who has uploaded their data but not signed the PRDE will only have access to the data of other non-signatories and not access the data supplied by the big four banks.

The advantage of CCR for credit providers

The information CCR offers credit providers is significant additional customer data. Where the previous system outlined negative data, such as defaults, judgments and bankruptcies, CCR enables credit providers to see the credit limit on credit cards, 24 months of repayment behaviour and account open and close dates.

For credit providers, this means the ability to better understand their customers and respond accordingly to aspects such as:

  • Discerning and disqualifying consumers who present a high probability of late payment and subsequent defaults
  • Segmenting customer portfolio to better manage risk

Fundamentally, CCR is about introducing Australia to more open and better credit data. It’s about aiding the evolution of new business models and educating consumers to make better financial decisions.

For every credit provider in the country, access to CCR means a better understanding of customers and members.

Get your business CCR ready

Read our introductory guide to find out everything you need to know about comprehensive credit reporting and how to benefit from the data exchange.

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Topics: Comprehensive Credit Reporting, Finance, Credit Lenders