Over the years, there have been two distinct ways credit execs gather information: from credit reporting services and from credit groups. Though there are common elements to each (trade data being the most significant) both are unique in what they do, and so typically, most credit execs have always used both.
In recent years, due in part to technology advances and increased competition, there has been something of a blurring of the lines between the two. For example, credit groups have been busy adding outside data like crazy to enhance the value of what they offer. And credit reporting services have been working feverishly to expand and enhance their trade data, but we've nonetheless felt they both were truly different animals.
Until now. When we took a look at this new service, we saw for the first time a system combining the best of both credit groups and credit reporting, along with a strong "social-network" component for something that just might be an industry game-changer.
The customer had expanded from two retail locations to eleven and was asking for a very substantial increase in their credit line. Not long ago a request like that would have taken Credit Manager Jennifer Collins of Sport North America, a division of BIC Corp., the better part of a day, and even at that point she might not have been comfortable with her decision. Now, she turned to her computer and "pushed some buttons." Within hours she had a decision (allow half the amount of the customer's request) in which she has complete confidence.
The system that Collins activated with those buttons was Credit2B, a recently launched credit information platform and reporting service developed by Smyyth that integrates credit bureau data with real-time industry trade reporting, all backed by analysts. The folks at Smyyth believe that credit managers have more customer intelligence, and their companies in the aggregate have more current and much better information than any credit bureau. To leverage these intelligence assets, an automated peer network became the core around which everything else is organized.
"We recognize that the real insight about customer credit worthiness is in the expertise, insight, and trade history of the thousands of credit managers and companies that supply those customers around the world," says Shyarsh Desai, Credit2B LLC's CEO. "We had a strong conviction that a peer-enterprise networking platform could harness, organize and analyze all this data into actionable credit information. The Credit2B patent-pending technology is simple to use but very complex under the covers."
Desai believes Credit2B will transform the way credit decisions are made by combining credit bureau data, financials, filings, news, with trade payments and instant peer references into one integrated platform. "We realized that if we created a social enterprise platform that had the ability to harness that power into a single system, then the need for a trade information supplier is moot. The Credit2B mechanism is designed to enable members to exchange experiences on common customers system-to-system as well as peer-to-peer in a secure controlled environment."
In addition to creating network connections with other companies with common customers, the system pulls third-party credit bureau information into a single integrated solution. Credit2B is thus designed to simplify the credit manager's job, bringing all the data points into one "holistic" system. Traditionally, credit professionals have had to go to multiple sources and make a lot of phone calls when gathering credit information. Desai believes customers like simple access and simple pricing all under one brand and one platform.
A Little History
Smyyth has a long history in the credit information business. It is affiliated with the Federation of Credit and Financial Professionals, which was founded in 1895 as the New York Credit and Financial Management Association, America's first credit industry association and the forerunner of the the National Association of Credit Management (NACM). Smyyth also owns Bernard Sands LLC, founded in 1925, a boutique credit reporting agency specializing in coverage of the retail and factoring industries. Furthermore, Credit2B replaces Smyyth's rationali credit services platform that provided account monitoring and the integration of credit reports, trade group data, and group communications. Credit2B clearly has good genes.
"We've made it relevant and fresh. If you do business with Sears, you are going to see the 150 members that you are connected with in our system that also do business with Sears, and you will see their credit trading experiences and their comments real time. Our data elements change by the minute. You could print a report three days ago that may be stale by today," says Desai.
Benchmarking Customers
The system also presents benchmarks alongside the data. A member pulling up a report on Target might find himself connected to 18 other members, but those are just the members in that member's industry. For benchmarks, the payment experiences of the 300 members in industries selling to Target are reported, along with how Target is paying factors. Incidentally, Credit2B claims to have 90 percent of the factors in their network.
"The system has been designed to cover every significant credit metric and to define core benchmarks against each one of them, not just at the account level, but at the portfolio level as well," explains Desai. "Knowing how they are doing against their networks, they are better able to manage their ARs."
User Experiences: System Improves Assessment of New Accounts
"They're connecting us with all of the other creditors who sell to the customer we're investigating and showing what their experiences are," confirms BIC's Jennifer Collins. "They're also providing bureau information." She's found the service especially valuable with new customers who may present unpleasant surprises.
Potential customers typically list vendors they pay promptly on credit applications. "But when you are working with Credit2B, they list everyone in the network who does business with the customer, some not as favorable," Collins notes. "You don't even need to contact references. The information is already right there. And if you wanted to you could press a button, and send a mass email to everybody in your network. If there is something to share about the customer in question they can respond by email.
"You really don't have to talk to anyone. It's all right here on the screen. However, at times I've asked for an analyst's help. They may call back within a couple of hours with some follow up questions, and they provide answers in no longer than a day," she adds.
Paul Setteducati, a 30-year credit management veteran, is corporate credit manager at Dual Electronics, and he believes in keeping the door open to any new information technology. "There are the old standards that some of us live and die by, and we become creatures of habit," he says. "I like to kick the tires and see what a new system can do can't do. I've done that with Credit2B, and I couldn't be more pleased.
And for him, Credit2B does what he needs. "I don't need pages of fluff, or all sorts of different recaps on how many different ways we can chop and dice the information. I want the information complete, concise and as well reported as it can be."
One of his concerns was how well the system worked with small customers on which there is little information. "We aren't so worried about the large accounts which are 80 percent of our business - everybody is going to be able to give us information on them. It's the moment you depart from that criteria that defines what kind of information you have and what's available. I was fairly sure that I would be able to trip these guys up, but I was wrong."
User Controlled Sharing of Payment Data
A big part of what makes Credit2B unique is its ability to create a peer-to-peer network for sharing payment data. Of course, sharing payment data is nothing new. It's been done in credit groups for a century or more. But the key difference with Credit2B is that users can choose who they want to share with and exclude others.
"One nifty feature is the financial news link," he continues. "If I just want to look at whatever current information might be out that there, it's right there. So it really has provided a nice, comfortable, one-stop solution, but it's very technologically driven."
Something else he expected to be an issue was anything but. "What if I have brand new customers that there is no information on? What will the turnaround time be? Previously, with another service, I had come to expect seven to ten days, which is not unreasonable. In the rare times I had that situation with Credit2B, I had it in three or four days."
In late August, he got an order from a small independent customer, only two years in business. "Lots of luck on this," he thought as he referred the account to Credit2B. But just three days later, "they validated the customer, provided reference information, verified the absence of negative information, and enabled us to qualify them with a $5,000 credit line.
"This is new, fresh, cutting edge. You can connect to your counterparts at the click of a button. To the best of my knowledge nothing like it exists. There are lots of good services, but Credit2B is able to do things the others can't."
Setteducatti is a firm believer in credit groups and is a member of two. "But if we had to cut costs, I'd drop the groups and stay with Credit2B," he says. "I'd still get what I've been getting from my trade groups, plus a complete credit report, but I get it faster and more efficiently."
Keith Reitman, Credit Manager of New Balance, adopted Credit2B in July 2013. "Our main information source had been D&B, but our contract was running out and we wanted to try something different. So we went with Credit2B. I like the look and the feel, the ease of use, and I like the clarity of the reports."
Connecting Beyond Your Immediate Network
Reitman found that the system connects him to multiple networks that let him reach out to people he had not been able to access before. "We have a lot of different connections now. We get the information quicker. The reports also include trade information we get in a limited way from in-person industry meetings, but now with Credit2B we get it any time, right on the screen, on a massive scale."
When credit applications come in now, the first thing Reitman does is run a Credit2B report. "Some reports have more info than others but that's how it always is, but Credit2B reports have specifics that D&B doesn't. If I need an account reviewed, I just click it, they update it and we get an analyst-reviewed report."
Dashboard Includes Account Monitoring
Credit2B also facilitates account monitoring. It does this through a management dashboard for viewing essential credit intelligence for every account in your portfolio. This includes alerts from your Credit2B network or Credit2B's data. You can also store account-level notes, documents, and financials viewable confidentially, and seen only by you and your team. You can also customize your portfolio views and create watch lists.
Our Take
We noted above that Credit2B has bold ambitions and certainly the rollout of their new service is impressive. And they're backed by a very solid and proven organization. They have a track record of success.
But do we think they'll make credit reporting bureaus obsolete? Not at all. We've heard this claim before - many times - and always made by smart, innovative organizations.
This truly is a step forward. But the key for anyone wanting to "make credit reporting obsolete" is marketing. And, while Credit2B is solid, there's just no way they can unseat the biggest players out there (D&B, Experian, and upstarts CreditRiskMonitor, Cortera, new-kid-on-the-block CreditSafe or dominant niche player F&D) with the marketing they have in place. They'll make inroads for sure. But their competitors won't take this lying down and they will adapt.
|
|
Editor
|
.png)
|
|
|
|||||||||||