No major bank has yet adopted comprehensive credit reporting, two years in
No major bank has yet adopted comprehensive credit reporting, two years in
An alternative lender has spoken out against the slow pace of Australian banks to adopt comprehensive credit reporting (CCR). According to RateSetter only three credit providers share information under the CCR scheme, none of which are major banks, despite CCR being introduced to Australia two years ago.
CCR, which has long been in operation in the UK and US, involves the sharing of all client data between lenders, not just 'negative' events. Participation in CCR is currently voluntary in Australia, but RateSetter CEO Daniel Foggo argues more incentives need to be put in place; “it’s really disappointing that out of hundreds of credit providers in Australia, only three have so far adopted CCR, despite the clear benefits to businesses and consumers. We think Government should move forward its timeframe for implementing regulatory incentives.”
Smaller lenders could potentially benefit from CCR as it would allow them to offer more competitive risk-based pricing, however major banks presently hold the vast majority of client data. The Financial System Inquiry in late 2014 endorsed the use of CCR, suggesting government could make it mandatory if banks were slow to adopt it. The FSI's final report noted that "the sharing of comprehensive data would likely foster competition between lenders and improve credit conditions for borrowers."
An alternative lender has spoken out against the slow pace of Australian banks to adopt comprehensive credit reporting (CCR). According to RateSetter only three credit providers share information under the CCR scheme, none of which are major banks, despite CCR being introduced to Australia two years ago.
CCR, which has long been in operation in the UK and US, involves the sharing of all client data between lenders, not just 'negative' events. Participation in CCR is currently voluntary in Australia, but RateSetter CEO Daniel Foggo argues more incentives need to be put in place; “it’s really disappointing that out of hundreds of credit providers in Australia, only three have so far adopted CCR, despite the clear benefits to businesses and consumers. We think Government should move forward its timeframe for implementing regulatory incentives.”
Smaller lenders could potentially benefit from CCR as it would allow them to offer more competitive risk-based pricing, however major banks presently hold the vast majority of client data. The Financial System Inquiry in late 2014 endorsed the use of CCR, suggesting government could make it mandatory if banks were slow to adopt it. The FSI's final report noted that "the sharing of comprehensive data would likely foster competition between lenders and improve credit conditions for borrowers."
