The only consumer credit reference agency in Hong Kong

Headquartered in Chicago, TransUnion is one of the global leaders in risk management solutions. TransUnion gives businesses and consumers the power to achieve their financial goals and helps build stronger economies worldwide.

The company has been operating in Hong Kong since 1982 and began managing the city’s consumer credit reporting system in 2003. As the only credit reference agency in Hong Kong, TransUnion currently maintains records on 4.95 million consumers in Hong Kong.

The company serves over 100 members in Hong Kong who are mainly banks and financial institutions. TransUnion compiles credit reports based on data received from its members as well as public sources of information. Consumers can order a copy of their personal credit report either online, by mail or directly from TransUnion’s office. Members of TransUnion are also entitled to access and review their customers’ credit reports before approving new loan applications or extending credit, in accordance with the Personal Data (Privacy) Ordinance and the Code of Practice on Consumer Credit Data issued by the Office of the Privacy Commissioner for Personal Data, Hong Kong.

Apart from credit reporting, TransUnion also provides a range of value-added services to banks, including an integrated suite of analytic and decisioning solutions that help banks manage risk more effectively and make objective decisions throughout the customer credit lifecycle.

The net assets incurred by Hong Kong’s business community and residents plummeted in the aftermath of the 2002 Asian financial crisis. In 2002, the credit card delinquency ratio was at a record rate of 1.56 percent and over 25,000 personal bankruptcy orders were issued by the courts, meaning that there were more than 2,000 cases each month compared to fewer than 900 cases per month in 1998.

It was against this backdrop that the first fully-fledged, regulated credit reference agency, a role played by TransUnion, was set up in Hong Kong. Prior to this, credit providers had primarily shared negative credit data such as non-payment of a debt, court judgments, bankruptcies, arrears and late payments, which was used as reference for credit decisions.

Increasing demand for credit reporting services
There has been a rapid growth of TransUnion’s credit reporting services in recent years. Several trends are driving the growth. The most important one is the increasing sophistication of Hong Kong’s banking sector. As banking services become more diversified and competitive, banks need more credit bureau information to help them perform risk assessment and make better decisions.

Changing regulatory requirements is another factor. In recent years regulations have become more stringent so it will be prudent for banks to use credit bureau services more often especially for portfolio management and customer acquisition.

The rapid increase in banks’ unsecure lending services is also responsible for the growing demand for credit reporting. More consumers order their credit reports when they apply for bank loans. With the rising trends of identity theft and fraud, more consumers are applying for TransUnion’s credit reporting and credit monitoring services to monitor unauthorized changes in personal data.

In fact Hong Kong people are feeling increasingly vulnerable to identity thieves, with 68% saying in an online survey commissioned by TransUnion, they were ‘worried’ or ‘very worried’ about becoming victims.

Analytic and decisioning solutions help banks make better and faster decisions
TransUnion provides an integrated suite of data, analytic and decisioning solutions to help banks manage risk more effectively, streamline business processes, and identify and manage fraud more efficiently. The solutions, developed and implemented based on data intelligence, help banks make objective decisions that drive their business.

One of the solutions in the suite is Identity Manager, which allows banks to verify and authenticate their customers quickly, conveniently and accurately.

Recently a major local bank partnered with TransUnion to develop Hong Kong’s first electronic identity authentication solution that allows instant loan approval. The service is powered by TransUnion’s Identity Manager solution.

Customers are able to apply for loans online or via a mobile phone app. They then answer randomly-generated personalized questions where the answers would only be known to the customer himself/herself. The authentication can be done in a matter of minutes and at the convenience of the consumer without needing to queuing up at a branch.