The Analysis News & Opinions


‘GDPR to necessitate checking of trading partners’


Credit and collections companies have been warned that they will need to verify the reliability of companies that they share data with, under the new GDPR rules. Speaking at a debate run in association


with Ascent Performance Group last month, Andrea Baker, global director of credit and collections at Inmarsat, said: “It is very much like an end-user certificate: you need to know who is using the data, and you might be able to get a tick in the box, but you cannot absolve yourself of the responsibility and accountability if your data get misused by a third party, if you cannot prove you have reasonable safeguards, processes, and procedures in place. “Whether it is down to you or not, your


reputation – even if you are not getting fined – could be severely damaged, and that is much more risky that any kind of fixed financial fine that you might face.” Senior credit professional, Atul Vadher,


said: “I was looking at some data recently that 500 businesses were polled in London and a quarter did not know what GDPR was. As of January, Austria and Germany were the only EU states ready for GDPR. So, whilst we are looking at the challenges that we have, the challenges for the rest of Europe are similar, if not greater. If you have done all your due diligence, done the best you can, and covered things off as best you can, then there will need to be some understanding that we are not alone. This is a new thing for everyone within Europe. “Once we leave the EU, this could


change. At the moment it is not going to, but it could do. Of course the bigger companies are dealing with this, but I think that a lot of the SMEs will decide that they will deal with it when something happens.” Ms Baker added: “It will depend on your


own legal teams and the risk assessment made by the legal counsel in your company, as to what type of risk-based approach they want to take. Because you cannot know what you do not know, and data comes and goes every day, and the amount of data flowing between outsourced databases makes it


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almost impossible to control. So, if you are expecting perfection from everyone on day one, you are looking in the wrong direction. You probably need to have continuous improvement and make sure that you have safeguards rather than wait and hope. “You have to train your staff that, if they


are going to write notes on a customer, or are writing an e-mail, then they have to write it as if both the customer and our chief executive is reading it. If you are happy that


both of them would be proud of what you are writing, then go ahead. If not, then do not send it. “There is a contextual question here too:


as a consumer, I will expect that my bank are interested and will need to know far more about me, in order to give me the service that I want from them. So it is important that they know about my circumstances, so that they can sell me the right products, and avoid the wrong ones.”


Mortgage lenders calm


A senior figure in the mortgage industry has sought to calm fears over increased risk due to rising income multiples and Brexit. Speaking to the UK Finance Annual


Mortgage Lunch, Stephen Jones, chief executive of UK Finance, said: “Lenders must ensure they only offer loans to borrowers who can afford it, and that those customers who do enter financial difficulty are given the support they need. So it is welcome news that across the country, overall arrears and possessions have reached historic lows. Last year there were fewer than 5,000 homeowner possessions, the lowest level since 1980.


www.CCRMagazine.com This has been helped by low interest


rates and a significant degree of forbearance by lenders. The Bank of England’s Financial Policy Committee recently raised concerns about credit conditions in the mortgage market, and particularly about high loan-to- income ratio loans. “But it is important to point out that a


higher loan-to-income ratio does not necessarily equate to riskier lending.” He added: “In fact the evidence shows


that the regions where high loan-to-income lending is most widespread actually have the lowest incidence of mortgage arrears.”


May 2018


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