With this eleventh episode of SME Banking Conversations, I continue the series of inspiring interviews on SME Banking, digital transformation, and people making innovations happen in the industry!
The recording of this episode took place in July when Kamil Gosławski invited me to their new CRIF Poland office in Kraków. We talked about ESG solutions, which CRIF Poland started to provide this year, and also about the automation of decision-making processes and credit information.
Read my conversation with Kamil below or hear it on Soundcloud:
Kamil, I’m very glad that we are meeting here in your office in Krakow. We know each other quite for some time. Please tell our viewers and readers about you and your path to CRIF.
KG: Hi, Olena. First of all, I’m glad to meet with you today and welcome you finally to our new office in Kraków. We are here since August last year. So, it’s quite a new place for us. And if to talk about me, I joined CRIF last year. I have quite strong experience in the financial industry in Poland. Previously I worked for a corporate company, which provides services for financial institutions like banks, insurance, loans, debt collection, and leasing in the area of automation and digitalization of back-office and operation processes. That gave me experience in different sectors. And I think that it is helpful for me to better understand and support our customers in CRIF. In CRIF I’m responsible for the banking and insurance industries and this is my core responsibility. I mainly operate with our global solutions like decision engine, capitalization, transaction engines, open banking, and a digital platform to assess and score ESG factors. And, of course, I can mention our core product – CSP – CRIF Solution Platform, which is devoted to credit checks of consumers and businesses.
How many people work now in CRIF?
KG: At the moment, in CRIF we have something about 300 employees in Poland in general. We operate as four entities in Poland. As CRIF Limited Company, KBIG – National Economic Information Bureau, ERIF, because we acquired it at the beginning of this year, which is also Economic Information Bureau plus an additional supporting entity – EBS. In CRIF Poland Limited Company, we have 250 people, and in ERIF – 50 employees.
Let’s talk about the ESG topic. This year you as CRIF became an ESG certification provider. ESG topic is becoming extremely important because of two things. First of all, of course, because of the regulations. And second, it’s becoming a measure of success so that more and more governments, investors, counterparties, and even consumers started to demand every business act responsibly. How to be successful in the ESG certification and measurements at that particular stage?
KG: I think that the most important question that we have to ask ourselves is why we need to certify and observe all the regulations and discussions with stakeholders. I think that the most important thing is to measure our ESG performance because it can provide us the information on how we can reduce costs. Also, with good performance of ESG factors, we can improve our brand perception on the market. And on the other hand, we can also be better employers because the new generations, the millennials, and Gen Z, want to work in companies that have strong capabilities and good performance on sustainable development. So, I think that that is crucial to report and score ourselves, but also our whole value chain, to have additional knowledge about their ESG performance. CRIF as a group developed a digital platform called Synesgy to evaluate and score the ESG factors. We launched that solution at the beginning of this year.
You, as CRIF Poland, did your first ESG certification this year. How do you evaluate your results? And whether the business model in the company has changed since that.
KG: Of course, as a service provider of ESG scoring and rating, we made the certification by ourselves, and at the moment we have a B score for the ESG factor. B is on a scale from A to E. So, it’s good ESG sustainable development for us, and that is a five-point scale of measuring it. And to be honest, we have very strong performance in the case of business, in the case of relation with stakeholders and society and in the certification of environment. But we have room for improvement in the areas connected with the environment. So, energy, water, and waste. We implement a couple of actions to improve our current status and our current score. So, we want to better manage the water consumption, also reduce the usage of plastic bottles in the offices and we implement some actions to better manage the usage of electricity, for example, in the usage of air conditioning and better manage of the lightning in the office. So, these couple of activities. And also we want to improve our performance of certification, we’re trying to manage ISO certification because we are compliant with the norms, and the standards of ISO, but we’d like to get the formal certification created by the external auditor.
Do you think financial organizations in Poland, maybe in general here in our region, besides the regulation part, because all of us know it is becoming obligatory. It became obligatory for corporations, and it will become obligatory in several years for SMEs. So, except regulation part, are the financial organizations mature enough to implement some really meaningful actions to implement E and S, and G model and strategy?
KG: As a service provider for the banking industry, we observe that there are ideas and some real actions to implement the ESG score and ESG KPIs into the scoring models. Last year on December 2022, EPA created a plan for all the banks on How to Manage ESG Factors in the risk management area. So, that’s why that is an obligation for the banks. And the main goal for the banks is to use received information and received data to manage their risk process. But the biggest issue is the lack of that kind of data on the market because, on the one hand, banks have information about themselves from the internal audit, but also they have to collect data about the counterparties and customers to make sure that direct impact of the bank is measured, but also the indirect impact for the environment will be measured enough for us all for, for them for that process.
If to talk more in detail about this tracking of ESG data, which I’m sure will be gathered as a result of this year. So, the next year some data will be already collected. How exactly ESG data can be integrated into the risk models and how it can be included in SME banking offer to make it a real competitive advantage?
KG: During the discussion we have with our customers from the financial industry, we observe that, as I mentioned before, the biggest issue is the fact that we don’t have enough knowledge and we don’t have enough information about our customers, about our counterparties. And CRIF has a digital platform to collect that kind of data, to measure and create the rating and score, to help the partners in collecting that kind of information. We have certain KPIs that could be included in the risk models. And based on that banks can, for example, include KPIs for their risk model, for the scoring cards, and for example, prepare preference conditions and terms for investment or financing agreements. It’s possible to use that kind of data to better understand the customers and prepare some additional products and services for customers.
Let’s talk about your digital platform, which, as you mentioned, combines the Credit Bureau, Economic Information, and rankings, and helps with that for all the financial organizations. What is new from your side in that area? What are new developments or new projects that you’re working on right now?
KG: Our portfolio of services is quite wide because we have global solutions, we have transformation services, and we have local solutions to identify and verify private individuals and business entities. I can put an example of our cooperation with one of the largest corporate banks in Europe in the case of implementing BFM services, because we as CRIF Poland are the bigger project at the moment, and we are trying to implement our categorization engine for the mobile app for the bank, and our entity from our CRIF capital group – Strands – have quite a nice tool to manage finances, for example, for SMEs. Based on that we can support SME companies in the area of tracking their incomes, and expenses, tracking the whole cash flow process to better understand how it works, and which capabilities we have to improve it or maybe what we should avoid to improve financial liquidity. So, we have such examples. Also at the moment, we discuss with one of the big capital groups in Poland, which have a bank and also a leasing company, changing the approach from the product to the customer approach in the loan origination journey. Also, we’re trying to support that customer with the decision engine, evaluate and maybe change the scorecard. So that could be the examples of how we can support our customers in the case of our products.
You mentioned the news about your acquisition of ERIF – Economic Information Bureau – and EBS here in Poland, it means that now have 50% of the market share, if I can say it, of information bureaus. What does it bring to your customers?
KG: Of course, I can confirm that at the moment after the acquisition of the ERIF and EBS, we have half of the market share of the economic information bureaus in Poland. We decided on that acquisition because we as CRIF Poland as a whole capital group want to improve our data, and we want to improve the products that we provide for our services. And we are sure that to leverage our performance, we need to get additional data. Because ERIF was previously connected with a debt collection group called Kruk, we get additional data from the debt collection area, and we get additional customers from the banking, insurance, and telco industry. The idea of the acquisition of ERIF is to integrate additional data sources into CRIF platforms, to CRIF products, and get additional value for the customers by delivering additional data and additional products in one place.
Watch the conversation below:
