0		CTOS-bashing:, Where's, beef?...

Many in the banking and financial industry in Malaysia regard CTOS as the successful Malaysian version of Dun & Bradstreet (D & B ), which offers credit risk information services with databases networked globally.

This US-based company has an operation in Malaysia, registered as Dun & Bradstreet (D & B) Malaysia Sdn Bhd. It is located at Menara Millennium, Pusat Bandar Damansara.

The company, which has a strong link to entities based in Singapore, is a part of the D&B Worldwide Network comprising more than 200 markets globally, claiming to host over 100 million records on individuals and corporations on this planet.

These are the key selling points flashed on its website:

TIME is the worst enemy of data.
Worldwide...
A corporation fails every 3 minutes
A new business is formed every 58 seconds
A company change occurs every 15 minutes
A company changes control every 15 minutes
A new set of accounts are keyed every 32 seconds
A business address changes every 15 seconds
A business telephone number changes every 24 seconds
A business files for bankruptcy every 8 minutes
A directorship changes every 32 seconds
A share ownership change happens every 6 minutes
D&B's database is updated every 3.9 seconds
D&B holds information on more than 100 million records

The records show D&B Malaysia is a joint venture between Infocredit Holdings Pte Ltd and Dun & Bradstreet which is listed on NYSE.

In turn, Infocredit Holdings Pte Ltd, which operates in a stealth mode and is a member of Credit Bureau (Singapore) Pte. Ltd, is a joint venture between NSP Holdings Pte Ltd and Baycorp Advantage Ltd.

While little information is known about NSP Holdings -- as it also operates in stealth mode -- it is noted that Baycorp Advantage is the new entity formed after the merger of Data Advantage and Baycorp Holdings in 2001.

However, latest findings show that Baycorp Advantage has since been name-changed to Veda Advantage. On the other hand, Baycorp still retains its original debt collection services, which it started in 1956, covering Australia and New Zealand.

The very existence of D & B Malaysia with its globally-intertwined linkages in Malaysia is an exemplary indication that setting up a service provider company to offer credit risk information and a host of related services on a commercial scale is allowed, thus not illegal, in Malaysia.

On the other hand, by giving such service providers like D&B worldwide, making it a listed entity on NYSE, it testifies that the banking industry and the business community require critical intelligence to help them make informed decisions on transactions of substantial monetary values.

This means that, with globalisation and Malaysian entrepreneurs flocking into the global business arena, all Malaysians are now subject to tight scrutiny of their credit-worthiness on a global basis, thanks to services to Dun & Bradstreet. The practice promotes transparency and business confidence along the way.

Seeing things in further context, July 2, the chairman of the Association of Banks in Malaysia (ABM), Hamidy Hafiz, is reported to have said that banking institutions in the country do not depend solely on the service provided by CTOS to grant or reject loan applications.

What he hasn't said is which are the additional sources that banks relied on apart from those outsourced top CTOS.

On the same day, in Bernama, the ABM chairman was again quoted as saying that banks will continue to use the services of CTOS because "it is a reliable source of reference for banks to extend quality loans and credit facilities". He also added that the local banks had engaged CTOS' services since 1988 as a "source of reference" and "library of information" to verify clients' history and background.

So, where's the beef in this CTOS-bashing? Who was the shepherd that drove our mainstream news editors into a frenzied herd?

Insights from an industry insider

Meanwhile, Screenshots received an insightful email from an insider in the banking and financial industry. The writer requests anonymity for obvious reasons. Here's the email in verbatim:

Hi Jeff

First, may I please start of by saying that my name and contact details are not to be reproduced on your blog, but otherwise, you can use this email as you wish.

I used to work in a bank, and in the 1990's, I was very heavily involved in the implementation of CTOS at our bank. The issues of privacy and defamation etc also concerned us at that time, but as far as I can remember, we concluded that there was nothing wrong with what CTOS did (at that time anyway).

I'm writing to you because I feel that there is a lot of ignorance as to exactly what CTOS does, and how it collects data. Here is an overview as to how I understand it to be.