This is an article repost.
Five of the country’s largest banks have joined forces with Chicago-based credit-reporting firm TransUnion Credit Information Bureau Inc. to help create a Credit Information Corp. (CIC), which will be owned by the government and various local entities.
Lawrence Tsong and Shawn Thomas, TransUnion president for East Asia and general manager of TransUnion Philippines, respectively, formally announced the partnership in a press briefing at The Peninsula Manila on Tuesday.
TransUnion joined Banco de Oro, Bank of the Philippine Islands, Citibank Philippines, HSBC and the finance company Metrobank Card Corp. to create a centralized credit-information system that would collect and share both positive and negative credit data.
It was not clear how TransUnion would function when the government-initiated CIC starts operations, although BPI President Aurelio Montinola III said TransUnion was organized to “complement” the CIC.
“TransUnion is in the business of helping build strong economies around the world through the use of credit information and analytics. TransUnion sees tremendous potential within the Philippines’ current financial infrastructure and it fits nicely with our strategic plan of expanding our presence within the region,” Tsong said.
TransUnion also operates in China, India, Singapore, Thailand and Hong Kong, where its regional head offices are located. It recently opened a unit in Vietnam.
According to Tsong, TransUnion Philippines started operations in July and focused initially on credit cards as part of a phased drive to increase its membership base and eventually include other activities later on.
He said TransUnion has started to gather personal information on credit-card borrowers, their educational background, credit record, employment history and other data that would allow banks and financial institutions to manage risks associated with lending.
Thomas said TransUnion has aligned its practices with local laws and regulations and will keep both positive and negative information in databases for up to five years only.
Such information is of utmost importance to lenders; bad borrowers are instantly relegated to a so-called negative list and may not be extended credit. This would allow lenders to generate billions of pesos in cost-savings in the process.
Montinola, now on his second term as president of the Bankers Association of the Philippines (BAP), said the TransUnion alliance with Philippine banks should serve the local credit-card industry and its 4 million credit-card holders using more or less 6 million credit cards.
“This is basically a private-sector initiative which the partners will piece together and we are just part of that group. The government initiative is being put up separately. Whatever the rule the government will put up under the CIC, we will comply,” Montinola said on how the two entities would work with each other.
In Photo: (From left) HSBC Philippines President and CEO Anthony William Cripps, Citibank Philippines Country Offi cer Sanjiv Vohra, Banco de Oro Universal Bank President Nestor Tan, TransUnion Inc. President for East Asia Lawrence Tsong, Bank of the Philippine Islands President Aurelio Montinola III, TransUnion General Manager Shawn Thomas and MetroBank Card Corp. President Riko Abdurrahman propose a toast as TransUnion launches a credit bureau in the Philippines with the country’s leading financial institutions. The launch was held in a Makati City hotel on Tuesday.
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By: Nonie Reyes
Source: Business Mirror, Aug. 9, 2011
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