Credit card issuers to share 'behavioural data' on customer accounts
24 November 2008 | 6510 views | 0
UK credit card issuers have agreed a framework for sharing 'behavioural data' on their customers' accounts as part of an initiative to meet political demands for responsible lending practices.
Starting this December, five credit card issuers - Barclaycard, Capital One, GE Money, HBOS and MBNA - will be ready to share the data, which will be available from credit reference agencies. Others will then follow in accordance with their specific IT plans, says UK payments body Apacs.
Traditionally, shared data for credit cards has included the customer's balance, credit limit and whether payments are up to date. The new data will now also include the amount of their last payment, and whether this was equivalent to the minimum payment; changes to credit limits; the extent to which they withdraw cash on their account and if the customer is signed up to any promotional deals.
The additional data will help the industry to identify customers who may be at risk of getting into financial difficulties and to deliver on commitments in the revised Banking Code, says Paul Rodford, Apacs' head of card payments.
"The holy grail for credit card companies is to have access to data that could predict a customer's future ability to repay," he says. "Data sharing is well established in the UK, and has evolved over many years. This new data relates to how customers manage their accounts and will enable lenders to intervene, at an earlier stage, for those showing signs of debt stress and ensuring that those already struggling are not given further credit."