The credit data landscape is more competitive than ever with fintechs leveraging innovations like Open Banking. Plus, new unsecured lending options like BNPL are even overtaking credit card use. But with credit bureaux charging organisations different prices for the same data, there’s a much greater need for fintechs to understand how their contracts stack up against competitors.

In part due to the Bureaux pricing veil being lifted, we've seen a huge shift in power in the relationship between credit providers and bureaux which is making it much easier for fintechs to gain better pricing to compete with the lower on-boarding and marketing costs of their peers. Put simply, more and more organisations are aware of the need for transparency and the ability to knock down opaque barriers so they can assess the best quality data options at the best possible price.

So, in such a highly competitive and niche market, how exactly do you compare bureau data pricing to get the best results for your fintech? Let’s take a closer look.

The challenge of comparing bureau data

Credit data is a very niche and complicated industry in which there is no published pricing. The result? It's extremely difficult for credit risk and procurement teams to compare products and it's near impossible to compare like for like.

Yet, having access to high quality data is essential within the credit industry to ensure scorecard improvement for credit firms and to enable fair and transparent credit decisions for consumers. Which is why major change is needed and the regulator has stepped in…

Currently, there is a lack of standardisation of the data provided by each bureau and the costs lenders pay for the same volume of searches. And that's why the FCA’s Woolard Review shone a spotlight to include this area as one that requires change in order to benefit consumers.

Find out more here: Improving consumer credit: A deep dive into the FCAs recommendations.

In addition, the review raised concerns around the complex data and technology contracts currently provided by bureaux which prevent credit providers taking advantage of the wider market with clear transparency around data quality and pricing. This also makes it costly for fintechs to switch and so allows CRAs to hold on to high pricing and reduces the availability of offerings for the consumer.

For procurement teams in other industries, access to data to compare suppliers is not a problem. They’re able to collect data for previous years, directly compare providers fees and therefore understand how to negotiate the best deal. Until recently, this is not something that has been available to credit risk teams. And that’s all thanks to data benchmarking.

For more information on data pricing, take a look at our previous blog: The state of data pricing: a glance behind the curtains.

Why are comparables important within credit risk?

Essentially, knowing exactly what other fintechs are paying for the same data, through each bureau, equips credit risk and procurement teams with information they need to aid contract negotiations. This helps them achieve the best outcome for the business as a whole and for customers (more on this here).

It may seem obvious - not being offered the same discounts as competitors is a major loss. But not just financially for the credit provider. Paying more for data means risk and marketing teams have less flexibility to attract and onboard new customers which can impact the revenue and profit of the wider business.