|ET: Dun and Bradstreet has been rated as one of the world’s leading providers of business information, knowledge and insight. How has your journey been in India and what do you envision for the company in the near term?
D&B’s Indian operations started in 1995 and the company has offices in Mumbai, Delhi, Chennai, Bangalore, Kolkata, Hyderabad and Ahmedabad. Dun & Bradstreet Information Services India Pvt. Ltd. (D&B India) offers its services to banks, financial institutions, multinationals, corporate entities, public sector undertakings, exporters and importers. In India, D&B operates four business verticals –
- Risk Management Solutions
- Sales & Marketing Solutions
- Economic Analysis Group
- Learning Solutions
Over the years, D&B has built strong strategic alliances & partnerships with –
- Export Credit Guarantee Corporation of India Ltd. (ECGC)
- SMERA Ratings Limited. (SMERA)
- Credit Information Bureau (India) Ltd. (CIBIL)
Near term plans for D&B India:
- To strengthen our position as a market leader in the Credit risk information space through enhanced coverage of company financials, growing our Trade Exchange program, developing Credit scores and credit recommendations.
- Help customers manage their credit portfolio risk better through our cloud based tool, D&B Prism that can be integrated into their workflow.
- Introduce D&B Compliance products into the market place so that CFOs/Boards can ensure that their entire supply chain is complaint with international legislation such as FCPA, UK Bribery Act, etc.
- Strengthen our Marketing database by 2.2 Million and enhance our professional contact database by 1 Million contacts.
ET: Investors today are looking for more and better financial information to make wise decisions. What is the role of your firm in generating financial information in this context?
KS: During the course of preparing our credit reports, apart from pursuing owners, partners or directors of business entities to provide information on their business, operations, management, promoters, etc., we endeavour to gather financial information viz. balance-sheets, income statements, etc. This is most critical in the case of sole-proprietorships and partnership firms where there is an absence of a central level public registry. In case of private limited companies, many times, getting income statements tendto be challenging.
Hence, in our various offerings we provide financial information and / or information having financial implications like, Default towards Debt Obligation, litigations, Provident Fund default, payment behaviour towards suppliers, etc.
At present, our database comprises of over ~61,000 records with detailed financial statements, ~115,000 plus records with key financial information, ~780,000 plus linked records, ~100,000 plus records with payment behaviour information towards at least 3 suppliers, etc.
Through our proactive efforts and during the course of credit report preparation, this business / financial information gets updated on a regular basis.This enables us to provide better insight to our client by way of risk rating, risk score, portfolio risk analysis and management, risk monitoring, benchmarking, etc. This helps our client in better risk management and to take informed decisions.
ET: Is the financial information sector in India well defined and what are the challenges that the Indian market in this sector faces when compared to other nations?
KS: Unlike developed markets, the Financial Information sector in India is still maturing. When it comes to Bulk Data Transfer from public registry and / or regulatory institutions, India still hasn’t caught up from a regulatory perspective.
Though, through the implementation of MCA21 e-Governance Project in the year 2006, the Ministry of Corporate Affairs has made a good beginning; India still faces the following challenges with regard to Financial Information Infrastructure:
1) Absence of central level public registry or repository for regulating registration, financial information collection, closure of non-corporate businesses (like Sole-Proprietorships and Partnerships which constitutes approx. 90% plus of India’s Commercially Active Universe CAU)
2) Absence of Bulk File Transfermechanism from public registry and / or other regulatory institution (through auto-feed, electronic feed, XBRL, XML, etc.) with regard to registration of businesses, updation of changed business records, financial statements, closure of business; litigation data, payment default data, alert facilities, etc.
3) Financial Statements filing in XBRL format needs to be made mandatory to all business entities, not just incorporated entities.
4) Availability of litigations data from courts on an online basis.
ET: Media and other sources today bombard investors with financial information that eventually makes it difficult for end users to make informed choices. Is this a matter of concern and what is your advice on how to discern fact from fiction?
KS: Yes. Investors and clients are indeed facing the‘Information Paradox’ - too much information, but very little actionable insight. Only those industry players, who can, by understanding clients’ requirements, provide indispensable content along with meaningful insight at the right time and in a right way to customers, are going to meet their needs on a sustainable basis. To turn information into a meaningful insight (thereby distinguishing facts from fiction), we, at D&B, follow a DUNSRightTM Process, having Quality Assurance being a cornerstone. This process of collecting and enhancing data has five quality drivers viz:
||Global Data Collection: We bring together data from a variety of sources worldwide.
||Entity Matching: We integrate the data into the D&B Database through Entity Matching, resulting in a Single, More Accurate Picture of each business entity.
||D-U-N-S® Number: We apply the D-U-N-S® Number (nine-digit identification) as a unique means of identifying and tracking the business globally through any changes it goes through.
||Corporate Linkage: The D-U-N-S® Number also enables Corporate Linkage to build corporate families to provide a view of Total Risk and Opportunity.
||Predictive Indicators: Predictive Indicators use Statistical Analysis to indicate the likelihood of a business to perform in a specific way in the future.
In today’s financial world, information is available in plenty with media and other sources continually giving updates on various financial parameters. This has resulted in end-users / investors faced with the dilemma as to which information to trust and which not to, in turn affecting their ability to make informed choices. Though the choice of end-users / investors depends on what purpose they intend to use the available information e.g. short-term or long term credit investments, it is necessary that they access the required financial information from the authentic and credible sources such as company’s annual reports, disclosures by regulators such as RBI, SEBI, or come to companies such as D&B.
ET: Your firm periodically announces the Optimism Index based on surveys of Indian Business. What is your reading of the current business environment in India?
KS: The Business Optimism Index & CFO Optimism Index is widely recognized as an indicator that measures the pulse of the business community and serves as a reliable benchmark for investors.
The survey on Business Optimism Index and the CFO Optimism index carried out by D&B on a quarterly basis reveals that a sense of confidence appears to be slowly returning among the business community even as business sentiment continues to be plagued by uncertainty. Expectations of revival in investment activity due to partial resolution of stalled infrastructure projects, equity inflows into India, resilience in Rupee and decline in inflationary pressure could be partly responsible for the trigger in business sentiment.
However, clear signs of economic recovery are yet to emerge. With the outcome of the Lok Sabha election, notwithstanding the positive sentiment, India Inc continues to exercise caution as the corporate sector remains highly leveraged and profit levels remain restrained. Also, weighing on the sentiment is the continued weak performance of industry and increase in risks to agriculture from the possible El Nino phenomena. In order to translate the optimism amongst the corporate into an upturn in the investment cycle, effective and speedy implementation of structural reforms to correct the economic imbalances would be required.
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