Credit Risk, Data and Decision-Making in Mortgage Markets with CRIF #12

In this episode of Mortgages Covered, , Richard Kemmish, EMF-ECBC & ISMMA Consultant, is joined by David Michele of CRIF, to discuss the challenges related to the credit of the underlying borrower in the mortgage chain, particularly in the less developed markets.

This Episode of Mortgages Covered explores:

• The role of trusted data and credit information in enabling confident decision- making within increasingly risk-sensitive financial environments. 
• CRIF’s evolution as a data-driven credit management company, delivering credit bureau, analytics, and decision-support solutions across diverse markets.
• The impact of digital transformation on banking, and the importance of balancing global technology platforms with local market, regulatory, and cultural requirements.
• How credit market development shapes economic growth, financial inclusion, and market dynamics, generating insights at both the macroeconomic and microeconomic levels.

Transcript

SPEAKER_00 0:00

The credit of the underlying borrowers is always a problem in the mortgage value chain. It's particularly a problem in some of the newer jurisdictions where they don't have the same data, the same track record, the same tools to make that analysis. It's a subject which Davide Michele of CRIF has been struggling with, and I spoke to him about this.

SPEAKER_01 0:24

If I have to describe the situation in terms of what CRIF is doing, we can easily look at the world we're living in. It's a world in which saying no is easier than saying yes. And when it comes to take decisions in the financial environment, it's gonna be higher the level of risk that you're gonna face. Therefore, there is the need of having a lot of information in order to be comfortable in taking decisions. This is exactly what CRIF has been doing over the last 37 years, more or less. We started in 1988 in Italy. And then we've got systems and services across the Americas, Europe, Africa, and Asia as well. What we do is basically we started from the basic pillar of the credit of the credit management logic, so data-driven company. Working with data means uh setting up uh credit infrastructure like credit bureaus. And we've got them uh in terms of delivery of systems in 34 countries, out of which uh kind of 20 are managed directly by Haas. But we're serving thanks to the uh idea of uh covering the possibility to understand and to provide value to different companies, uh much more than the 34 countries in which we deliver the credit bureau. Um as a matter of fact, the idea of the Credit Bureau and data-driven solutions are based on the word trust because uh as well as uh the um the idea of uh money, since we're talking about money during this conference, um there is no possibility to have business and reliability on the things that we are doing without having trust. And that's what basically uh credit management infrastructure are doing. Um we are providing uh a number of services apart from the Credit Bureau itself. We are providing analytics solutions which are helping to take decisions. Uh, we are providing uh um consultancy uh uh in order to support our clients all over the world, uh, and we are moving towards a world in which uh change of technology is key as well. So we are uh anticipating, like pioneering a little bit, you know, the number of things that uh from the digital world are taken, and uh we are kind of driven by the fact that uh the digital change is completely changing the activity uh banks are doing in different countries, but also connecting very much to the local culture and the level of customization which is needed.

SPEAKER_00 3:16

That that intrigues me a lot. In those countries, I know you operate in a lot of developing markets where presumably data is incredibly difficult to get hold of or just has in a very different form from Italy, where you started, for example.

SPEAKER_01 3:30

Yeah, absolutely. It's uh it's absolutely uh different, but I I guess that you know one of the things that we learned over time is to uh learn by doing. So different cultures uh have been uh able to transfer us experience that we used in the next country project that we were doing. And um, surprise, surprise, I mean, the vast majority of the things that we are doing in many different countries are more or less the same in terms of uh activity. There is a core part of the credit management infrastructure which is common between all the countries. But the the 15%, which is different from country to country, is considered to be key because it is actually expressing the culture of credit of each and any market. So this is something which is in a way creating the backing of um of what actually we we are doing um in terms of financial infrastructure. Uh all the activities that we do in several markets when we enter, we see the difference after a period of years, three to four years, uh, how the uh the environment macro and microeconomical is changing uh in light not only of the credit bureau but in light of the chain that has been uh stimulated by the activity the Credit Bureau introduces.

SPEAKER_00 4:50

We're here in Stavanger this week. It's great to have you here. Um what are you hoping to take away from it? What's your message to the delegates?

SPEAKER_01 4:57

Well, uh a lot of a lot of things, because actually uh the uh interesting part is actually um as part as the uh as uh as you know as um part of the activity that we have been doing over time never has been connected that much to the secondary market of the mortgage, for example, which is uh pretty much close to the idea of the cobalt bond. So for us, it has been uh very interesting to understand what is in the background, uh different models, for example, you know, I I've I've never gone that in detail with uh the US model, for example, which is very different from the one that we've got uh in uh uh in Europe or in other countries. Uh and uh and this is something that will uh also stimulate uh the possibility to support this uh this industry in a different way in the future.

SPEAKER_00 5:48

Great. Well, thank you very much for for being here for doing that and for joining us today.

SPEAKER_01 5:52

Thanks a lot.