This year Experian will be celebrating its 15th Annual Conference. As one of Southern Africa's leading credit conferences, the Experian Annual Conference is a long-established and highly regarded industry event that brings together industry experts from South Africa and around the globe to share their insights on today's most pertinent credit topics.

In the last 15 years, the conference has hosted delegates and speakers from all the major banks, retailers and telecommunication companies in South Africa and around the world. It provides delegates with an opportunity to not only leverage from the knowledge of industry specialists but to network with other senior professionals within the industry.

Getting Back-to-Business

Over the last few years, the South African credit landscape has been marked by continuous change – shifting markets, a dynamic economy and new legislation, all impacting the way industry players do business. But change is inherent to any business environment, thus managing and responding to change is a business fundamental. This year's conference looks forward to opportunities to optimise strategies , strengthen customer relationships and gain competitive advantage within the evolving credit environment.

This year's presentations and panel discussions draw from the knowledge and experience of industry experts, clients and the Experian global team.

Key themes include:

•  Practical examples which minimise risk and maximise reward

•  Global trends

•  Taking advantage of data and the latest technology to make more informed decisions

	Experian's expertise in providing credit risk solutions led to the company's inclusion in the report highlighting the top 14 vendors out of more that 60 considered in the Basel II market.

Experian's specialised Basel II solutions focus on credit risk and include a risk engine calculator and reporting tools as well as consulting services and analytics. This year's specific criteria of calculator functionality and data management capabilities highlighted the differentiation between Experian solutions and that of the company's standard competitors.

“Experian offers analytics, software and consulting services to support the implementation of Basel II. Transact SM (application processing management), Probe SM (behavioural customer management) and its Portfolio Reporting Studio (monitoring and reporting) are the key products within the offering,” noted the Gartner report. “Transact SM and Probe SM use a business rule engine – Strategy Management – that contains the analytics necessary to meet Pillar I requirements for capital and economic calculations.” Experian has more than 50 clients globally using its Basel II solutions, including software and/or consultancy and model development.

“We're pleased that Gartner recognised our role as a specialised provider in the Basel II market,” said Elio Vitucci, Managing Director, Experian Decision Analytics . “Basel II is proving to be a significant catalyst in establishing best practice risk management in many organisations. As Experian has been working with financial services providers for decades to improve operational efficiencies, implementation of Basel II solutions leverages our expertise and relationships, and is among the company's core competencies."

	Experian, the global information solutions company, has acquired the Tallyman debt collection management software and operations. Tallyman will be become part of the Experian Decision Analytics business to create an innovative and complete collections solution.

Tallyman is a market-leading collections management software package that helps organisations to build more focused and closer relationships with their customers by ensuring that revenue collection processes are fully aligned with their business' objectives.

Some forty clients currently use Tallyman to successfully manage more than 20 million customers and control the collection of more than £ 1.25 billion ( $2.5 billion) of debt. The Tallyman solution is used around the world by organisations and businesses that grant credit to consumers, such as banks, building societies, loan providers, credit card companies and debt collection agencies, as well as organisations that provide consumer credit as part of their business model, such as retailers, utilities and communications companies.

Tallyman offers a rapid return on investment by reducing the amount of cash locked up in outstanding debt and reduced debt write-off, resulting in a lower cost of collection. Its unique value lies in its ability to segment customers in arrears in the same way that marketing departments segment customers and prospects using CRM systems.

The Tallyman solution is based on three key functions: decisioning (from customer segmentation to strategy setting), collections (to manage customers and the collection process) and analytics (to model strategies and predict outcomes). Continuous improvement in the collection process is achieved using tools for visualisation, simulation and champion/challenger testing of new strategies and collection models.

The Tallyman technology is compatible with Experian's existing Decision Analytics product set and its integration will enhance the capabilities and functionality of Strategy Management, Experian's market-leading decision engine, and its expertise in strategy optimisation.

The enhanced collections solution developed by combining Tallyman and Experian's solutions will allow organisations to add significant value, with a substantial impact on their overall profitability, by making the collections function more efficient and improving the productivity of each action addressed to customers.

Brian Dewis, Chief Executive for the Tallyman operation , said: “Becoming a part of an international group like Experian will open greater opportunities to extend the proven benefits of Tallyman. It will also benefit our clients and any company with an interest in improving its collections processes.”

Elio Vitucci, Managing Director, Experian Decision Analytics, commented: “With this acquisition, Experian is reinforcing its commitment to providing its clients with best practice solutions covering the entire customer life cycle by offering them a first class, innovative and powerful collections management solution. The integration of Tallyman into Experian's collections solution will allow us to continue to innovate and increase our competitive advantage in credit collections.

“The combination of the Tallyman solution in different vertical markets, including telecommunications, utilities, public sector and financial services, and Experian's leading position throughout EMEA and Asia Pacific will enable us to meet clients' requirements in any market.”

Tallyman has been purchased from Talgentra, a provider of software and services for billing and revenue collection.

	Vodafone Italy has announced its implementation of the fraud detection solution, Hunter, from Experian Decision Analytics.

The Hunter solution is a web-based service to identify potentially fraudulent new subscriptions, which will enable Vodafone to detect and prevent fraud at the point of application, creating another barrier to prevent fraud.

The automated Hunter solution is implemented in the online environment, is fully integrated and operates in real-time alongside the application processing solution. It works by checking for inconsistencies in each application and comparing the data against the integrated information store of previous applications and suspect information. This ensures that Vodafone can match the application against fraudulent, declined or previous applications and identify where an alias, false details or impersonation is being attempted. However, Hunter isn't just a detection tool - it is also an interactive investigative tool that helps the investigation team to review an application and determine if it is fraudulent. Fraud detection continually improves and reflects new fraud trends as the database and rules are updated with every suspect case.

Ortenzio Bibbò, Credit Manager of Vodafone Italy , commented: “Vodafone´s aim is to improve fraud interception systems and to reduce the loss rate. Hunter was the right solution as it stops fraud before it starts, at the point of registering new customers; Vodafone Italy has approximately 140.000 new applicants per year. Experian demonstrated the very high value and the benefits of Hunter, and above all, this solution meets all our requirements of flexibility and integration in our system, being user-friendly and also able to manage different databases.”

Miretta Menarini, Head of Telecommunication, for Experian Decision Analytics, Italy , said: “Fraud is undoubtedly a major problem for the telecom industry. It is estimated that there were fraud-related losses of $70 billion in 2005, which will increase to $93.5 billion by 2010*. The implementation of Hunter shows that Vodafone is at the forefront in the fight against fraud and will significantly reduce the problem, thus gaining a privileged position against its competitors.”  She added: “We are very pleased that Vodafone chose us. This decision reinforces our partnership as Experian already assists Vodafone Italy in managing the entire client business cycle from the registration of a new client to proactively managing the existing customer portfolio.”

A look at the impact of the credit information amnesty on Experian Credit Bureau

1 June 2007 was a significant day in the South African credit industry with the final sections of the National Credit Act (NCA) coming into effect. For South African credit bureaus the deadline required the enactment of the regulations relating to Section 73 which makes provision for the removal of certain consumer credit information from consumers' credit reports.

As a reminder, the credit information amnesty requirements included:

•  Removal of all dormant accounts older than 24 months i.e. accounts where there has been no payment and no default in 24 months.

•  Removal of all default accounts, listed prior to 1 September, 2006 less than or equal to R500.

•  Removal of all judgments, listed prior to 1 September, 2006 less than or equal to R500 unless the consumer had more than 2 judgments.

•  Removal of all judgments, listed prior to 1 September, 2006 less than or equal to R5000 and older than 18 months, unless the consumer had more than 2 judgments.

•  Removal of all paid up judgments, listed prior to 1 September, 2006 less than or equal to R50 000.

With regards to these requirements Experian is pleased to announce that it is compliant with the regulations set out in Section 73.

In addition, consumers still have until 1 September, 2007 to apply for the removal of judgments that have been paid in full, listed prior to 1 September, 2006 that are less than or equal to R50 000, on presentation of the proof of payment.

There has been enormous discussion surrounding the ultimate impact of the credit information amnesty and debate as to how many South African consumers it would actually affect. According to preliminary research conducted by Experian, the credit information amnesty resulted in over 16 million records being removed from Experian Credit Bureau's records consequently benefiting more than 6 million consumers.

There is further evidence of a positive score shift for all consumers who benefited from the credit information amnesty. Although policies vary greatly by portfolio and credit grantor, it is anticipated that 2.1% - 3.6% more consumers will now have access to credit that they may not have had access to prior to the data amnesty.

	The National Credit Regulator wishes to clarify the position from 1 June 2007 with regards to the submission of data to and enquiries from the National Loans Register (NLR). The micro-lending industry, credit bureaus and other service providers have all invested a huge amount of effort into creating the NLR and have ensured that it adds value to its users.

Various stakeholders, including the MFSA, the Consumer Credit Association and credit bureaus have indicated that every effort should be made to ensure that the investment that has been made in the NLR does not get lost in the transition to the National Credit Act.

This circular aims to provide clarity both on the legal position of the NLR after 1 June 2007, as well as on the institutional arrangements for the continued management of the NLR.

Legal position with regards to submission of data to, and enquiries from the NLR after 1 June 2007

The position with regards to loans granted before 1 June 2007 is as follows : Loans that were granted before 1 June 2007, continues being subject to the Exemption Notice until such a loan is paid off. During this period, the micro-lender remains obliged, in terms of the Exemption Notice, to submit monthly data to the NLR. This applies to updates in respect of registrations, monthly payments profiles and closures. The existing requirements continue applying, including the periods within which different types of information should be submitted.

The position with regards to loans granted after 1 June 2007 is as follows : Such loans will be subject to the reckless credit provisions of the National Credit Act. In order to avoid the risk of be classified as reckless, the credit provider would at the very least have to indicate that it took reasonable steps to assess whether a consumer could afford the loan repayments. The NCR would generally not consider a credit provider to have taken the ‘reasonable steps' as required by section 81(2) of the A ct if a credit provider did not at least do an enquiry from the NLR or the CCA data hosted by a registered credit bureau . Apart from doing such an enquiry, the credit provider would typically also have to consider the other requirements of section 81(2) and the related sections of the Act. The credit provider is required to consider all the existing debt commitments of the consumer, in comparison with the consumer's income and other commitments. Credit providers would normally also have to consider a recent salary statement or ‘pay slip', in order to confirm the income and to identify any obligations that are recovered by means of payroll deductions.

In order to be allowed to do an enquiry on the NLR or the CCA data, the rules of both the NLR and of the CCA requires that a credit provider must also submit data. Therefore, in order to do enquiries and to avoid being classified as reckless, a micro-lender would have to continue submitting data to either the NLR or to the CCA section of the credit bureau data. This also applies to loans made after 1 June 2007.

Arrangements for the management and control of the NLR

Current position : Currently, the NLR is managed by the NCR, through Service Level Agreements with the credit bureaus and Memoranda of Understanding with the CCA and the different service providers. Operational oversight is provided through a committee in which all the stakeholders are represented.

Future arrangements : The MFSA and CCA approached the NCR in order to discuss the arrangements for the management and governance of the NLR in the future.

The NCR, CCA and MFSA have in principle agreed that a new management structure will be established to take over the management role that the MFRC used to fulfill since the establishment of the NLR. The current management structure will therefore be transferred to a new body, in which the MFSA and CCA will both have representation. Until the necessary legal documentation has been finalised, and the approval of the relevant governing bodies obtained, the NCR will remain responsible for the management of the NLR. As in the past, the representatives of the lenders, who are the primary users of the NLR data, and the credit bureaus will be consulted in all decisions related to the NLR.

Definition of loans submitted to the NLR

The National Credit Act does not contain the same maximum loan limits as was contained in the Exemption Notice. It is thus foreseen that micro lenders may also issue loans in excess of R10 000. It is recommended that all loans be reported to the NLR, including loans above R10 000. Please contact your service provider for more information.

Participation of new institutions in the NLR

Any credit provider that is not yet a member of the NLR but wishes to participate in the NLR must apply in writing to the NCR (or the governing body that will be established in the future), for such participation. The fact that an entity is registered as a credit provider in terms of the National Credit Act does not give such an entity an automatic right to participate in the NLR.

Credit providers can also contact the NLR service providers, who would be able to provide further information and assistance in respect of participation. A list of the NLR service providers can be found on the NCR web- site at www.ncr.org.za .

Establishment of the National Credit Register, as required by section 69 of the Act

Section 69 of the Act provides for a National Credit Register. This is a fundamentally different register from the current NLR. The NCR does not envisage that the National Credit Register could be based upon the current infrastructure of the NLR.

We do not envisage that this new register will be operational until the middle of 2008. Until that time, lenders would have to do enquiries on the NLR and the CCA database maintained by the credit bureaus. Any lender that does not do such enquiries will run a serious risk of contravening the reckless credit provisions of the National Credit Act.

Experian is proud to introduce a suite of three Delphi generic bureau scores: Delphi for New Business, Delphi for New Markets and Delphi for Customer Management. This suite of highly predictive and NCA compliant bureau scoring models is set to replace Delphi II as Experian's flagship generic bureau score offering over the next couple of years.

The existing Delphi II bureau scoring model was designed for use as an effective tool for targeting and acquiring new customers within the traditional lending market. Over the years it has proven itself to be an extremely effective predictor of risk within this segment and has assisted in enhancing Experian's reputation as a leader in scoring analytics.

During this time, a growing need for a highly predictive bureau scoring model that optimises acquisition within new portfolios, emerging markets and higher-risk segments has led to the development of an alternative bureau score: Delphi for New Markets . This new addition to the Delphi offering promises to provide lenders to the higher risk market segment greater assurance that their customers will perform well, if accepted and will strongly support responsible lending within this segment.

As far as our traditional lenders are concerned, we will continue to provide the best of what Experian has to offer when it comes to highly predictive acquisition scorecards. Delphi for New Business will assist traditional lenders in targeting and acquiring the most profitable customers in the market. Delphi for New Business is a refreshed acquisition bureau-based scoring model featuring even greater predictive strength than its predecessor, Delphi II.

In addition to acquiring new customers, lenders also need to manage risk and optimise profitability within their existing customer base. Delphi for Customer Management will assist lenders in deploying effective customer management strategies such as limit increases, product cross-sell campaigns and prioritisation of collections across all segments. If you already have your own behaviourial scoring systems, Delphi for Customer Management can provide an accurate risk assessment of activity outside of your organisation, providing a true customer view. If you don't, Delphi for Customer Management is predictive enough to be used as a stand-alone behavioural score.