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How fintechs are negotiating RPI-linked reductions in bureau data contracts

While the consumer price index measure of inflation hit 9.9% in the year to August 2022, marking a small fall, following a 40-year-high of 10.1% in July – it is still well above the Bank of England’s 2% target.

The squeeze on business operating costs is also reflected in the latest retail prices index (RPI), as it hit 12.3%.

Fintechs are absorbing as much of these additional costs as they can, but it is a common clause to add Retail Price Index (RPI) increases to bureau data contracts.

On a more positive note, this can be an opportunity to review data prices across the board. 

In this article, we explore how some fintech lenders are negotiating this down to capped or reduced levels and how you can do the same. 

Let’s dive into it. 

Deepening supply chain transparency

After a year of continual and intensive action to adapt to a rapidly evolving macroeconomic landscape, many procurement teams have deepened their understanding of their supply chains and deployed new levers.

But more can be done.

A key question we’re hearing right now is how to quantify the potential impact of inflation, RPI volatility, and supply chain disruptions at the data supplier level.

Essentially, the economic climate dictates it is time for procurement departments to re-examine their approach to the use of the retail price index. 

That’s why many procurement managers are looking at the Retail Price Index (RPI) on all supplier contracts to ensure cost increases are limited.

Impact of Retail Price Index on data contracts

The retail price index is often used as a measurement for price increases in commercial contracts - particularly long-term contracts - like you’d find with credit data supply. 

The RPI aims to ensure prices remain profitable for suppliers, such as the bureaux. 

The general trend we’re seeing for data contracts is that some Bureaux are adding upwards of 12.3% to existing costs at the annual point of a multi-year contract. This is likely to get much higher.

How to fix lower RPI rates

The key point here is that the majority of these contracts have search cost pricing already over-inflated above what the same supplier is charging your fintech peers.

So the first thing to look at is whether you are paying over the odds for your data supply already, and to look at whether you can reduce or cap the RPI rate. 

The good news is, some bureaux are fixing RPI at low rates on renewals.

But you need to be aware of what your data supplier is offering others in your vertical and spend footprint (in terms of pricing) and RPI to make sure you get offered the same discounts.

There is also a huge opportunity for those mid-contract to re-negotiate their RPI clauses and review their pricing given others are being offered preferential terms in both areas.

Essentially, lenders and credit providers with existing contracts which contain a RPI-linked price increase mechanism should consider agreeing an alternative with their supplier. 

A quick contract checklist

When reviewing contracts it’s key to understand how much you are paying for data compared to peers, and whether RPI is included, and if it is capped.

Here is a checklist you may want to consider:

  • What unit rates for data are we being charged compared to peers? 

  • Is the retail price index included in our bureau contracts?

  • What rate are you being charged?

  • How does this compare to others ? 

  • Have you reviewed any alternatives?

  • Do we have a strategy to deal with our approach to RPI increases?

In summary, you need to know exactly what RPI you are being charged, how much this has increased to, and what your peers are paying. An independent data benchmark exercise can help with this. 

📖You can read more about data benchmarking here.


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Nick Green

Nick Green


Purple Patch Broking Ltd

Member since

07 Dec 2020



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This post is from a series of posts in the group:

Financial Supply Chain

In the world of international trade, the process of exchanging payments, information and documents between buyers, sellers, banks, and other involved parties is becoming increasingly important for financial institutions. This community aims at presenting views and innovative ideas related to this financial supply chain space.

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