HKAB raises service bar for credit reference industry

A new operating model enabling Hongkongers to use the services of multiple credit reference agencies will for the first time start on April 26, the Hong Kong Association of Banks (HKAB) and two other industry groups announced yesterday.

The programme, called Credit Data Smart, aims to promote competition in the consumer credit reference industry and enhance service quality.

It will enable people to obtain a free credit report from three agencies, namely Nova Credit, PingAn OneConnect Credit Reference Services Agency, and TransUnion Credit Information Services, once every 12 months.

The programme marks an important milestone in the development of consumer credit reference services in Hong Kong, as the city previously had TransUnion as the sole agency.

With the participation of multiple institutions, the new model can provide more secure and reliable consumer credit reference services to the market, according to the HKAB.

“It gives the entire system much more resilience going forward, and that competition will create much better service quality for consumers and banks alike,” Luanne Lim, chief executive of HSBC Hong Kong and chairwoman of the HKAB, said at a press conference yesterday. “That’s a really big leap for us.”

The announcement comes as global credit risks have risen over recent years, driven by slowing economies and industrial crises, hurting banks’ lending efficiency.

Last month, China’s top four state-owned banks reported a more than 10 per cent increase in bad loans last year to 1.23 trillion yuan (HK$1.33 trillion), as credit pressure rose in areas closely tied to the troubled property sector.

“In terms of the credit landscape, we do expect to face some headwinds,” said Arthur Yuen Kwok-hang, deputy CEO of the Hong Kong Monetary Authority.

“The mainland developers’ situation has not really settled, and we are reminding the banking sector to be on high alert to the credit risk landscape and to manage the risk properly.”

Competition will create much better service quality for consumers and banks alike LUANNE LIM, CHAIRWOMAN, HKAB