Nation building credit info system
Overseas companies may get green light for entry, central bank official says
China’s financial regulators are building a nationwide credit information monitoring system, based on assessing the debt payment ability of businesses and individuals, and overseas credit information service companies will be allowed to participate in it, said a senior official with the central bank.
More overseas institutions providing corporate credit information services are expected to register with the domestic regulatory system managed by the People’s Bank of China, the central bank, Wan Cunzhi, director-general of the PBOC’s Credit Information System Bureau, told China Daily in an interview.
“The opening-up process will not stop,” he said.
A top-level Italian credit information service company has recently been preparing for registration, according to a source familiar with the matter. So far two foreign companies have already registered on the central bank’s management system.
In September, the central bank finished its review of an application filed by Experian Credit Service (Beijing) Co Ltd, the China subsidiary of wholly British-owned company Experian, to provide corporate credit services, including investigation and assessment of enterprises’ credit situation, providing credit reports to clients and supporting debt collection.
The subsidiary has launched some projects to assess small and medium-sized enterprises’ credit information working alongside several local partners, aiming to contribute to China’s SME financial services, said Li Wei, deputy general manager of credit services at Experian China.
The projects that Experian is designing for the Chinese market focus on business credit reports and monitoring, decision and analytics, data quality and audience targeting to improve customers’ decision-making capabilities, according to Li.
“Overseas institutions in the sector usually have advantages in technology and data analysis, with relatively world leading industry experience as well as the global resource integration capability,” he said. “We also notice that more potential competitors, from both domestic and overseas, are preparing to enter this market.”
Li said Experian attaches great importance to industry compliance and clients’ information security and inputs great manpower and resources to achieve data security.
“Apart from the company’s global standards on data management and compliance, we also need to follow the Chinese regulations after the registration,” he said.
Based on concerns over the protection of individual privacy and data security, China’s financial regulators have yet to open the personal credit information service to overseas companies. Before Experian, Dun & Bradstreet, a US credit information servicer, registered on the PBOC system in 2017.
China has established its own private credit-scoring company — Baihang Credit Scoring — in Shenzhen, to collect, store and manage personal credit information. It was jointly founded by eight credit firms including Tencent Credit and Alibaba-backed Sesame Credit, as well as the National Internet Finance Association of China.
Baihang Credit Scoring expects to provide products and services before the end of this year, said Wan.
Including internet finance and peer-to-peer lending information in the national system is the next step in the top financial regulators’ plan. The system will also include data from securities and insurance companies in the future, according to Wan.
“Information leakage and hacking could be potentially major threats to the credit information system’s security,” he said. “So far, the system is generally stable, and has not displayed any serious leakage risks.”
China’s nationwide credit information system is composed of a national financial credit information database and market-oriented credit information institutions. By the end of August, the national database included information on 25.42 million companies and 970 million individuals, becoming the world’s largest.