Evolution of Social to Virtual Credit Groups for Data Interchange

Creditors and lenders have always informally relied upon reputation of other debtors in deciding whether to lend to a business, and how much credit they can safely extend to their customers. For the past 150 years or so, the exchange of this “trade data” was enabled by local industry social groups – i.e., credit managers meeting for periodically (e.g., monthly for lunch) to discuss customer credit issues. These meeting often were beneficial, but due to their limitations (and risks) have been challenging to attend either because it means leaving the office for long periods to discuss a limited number of accounts several of which may be irrelevant to your company and even if they are you can cover very little during an in person meeting. Probably the greatest challenge is that you wait for long intervals between meetings to get information and when you do end up the number of attendees as shrunk which means there is less data available or simply that your company is in multiple industries so a single group does not suffice.  You then have the conundrum of attending multiple groups but no real integration of data with your enterprise customers.  

Today, because of the acceleration of business decisions, and geographical scope of commerce, these groups are increasingly challenged to prove their relevance to CFOs who are data driven and know that time-bound information is critical.  At the center of all of this is they lack the ability to scale, with better interchange technology and powerful machine learning techniques that can identify negative trends quickly across millions of accounts in real-time. While these social in-person discussions can help with the anecdotal and qualitative aspects of doing business, they are not able to take advantage of  large-scale data, analytics,  and have limited breadth of account coverage.

When major companies were located in a relatively small number of industry-centers, this made more sense. Today, commerce is more “real-time” and not regional but “global and diversified’, and because of this,  wider reference points are need, and is only possible with internet-based systems –such as Credit2B – that replace and automate the old Modus Operandi. It is impossible to gain the quality of credit reference data required today by doing it via these old-fashioned, in-person groups.

The Credit2B platform – now with about $1 trillion of trade – enables companies around the world that are not necessarily direct competitors, but do business with the same customers, to link-up in “virtual” online credit groups to benefit from an extensive information exchange to simplify and speed making better credit decisions, and anticipate how these customers will pay their bills.  Credit2B’s machine learning scores based on these real-trade industry networks (or traditional credit groups) versus what is often delivered from bureaus has proven to be significantly more predictive of financial stress.  Creating connections on Credit2B’s unique platform allows you to selectively create a highly secure network for the exchange of customer payment information in real time.