Fitch Ratings Inc. Competition
Now Viewing Fitch Ratings Inc.'s competition in: Credit Collections and Services (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
If credit reporting, does the agency have large repeat customers, such as mortgage companies, employment agencies, banks? - National companies sell their information directly to big users like Fortune 500 companies and large financial institutions, while reporting agencies act essentially as retailers, buying their information from national companies and reselling it to small users.
If collections, what percentage of customers are large and small companies? - Collections customers are mainly businesses.
If collections, in what industries are the agency's customers? - Of commercial business, 70 percent comes from the banking, utilities, telecommunications, and healthcare industries.
How does the company find new customers? - Consolidation in the banking, utilities, telecom, and healthcare industries in recent years means that there are fewer, but larger, customers for collections agencies.
What percentage of business is new versus repeat? - A sharp increase in consumer and other debt in recent years has increased opportunities in the credit and collections business.
How has increased competition from the Internet affected the company? - Smaller credit reporting agencies are likely to face greater competition from national companies, as access to credit reports becomes easier and cheaper, especially through the Internet.
Competitive Landscape
Demand for credit reporting and for collections services are driven by the volume of financial transactions, and by the health of the economy. The profitability of individual companies depends largely on efficiency of operations. The profitability of collections companies that buy receivables portfolios depends on their ability to assess recovery potential. Large credit reporting companies have significant economies of scale in operations. Small companies can compete successfully in the collections segment, where customer service and personal contact are important.
Business Challenges
CRITICAL ISSUES
Economy Affects Receivables Recovery Rates, Credit Reporting Volume - Collection agencies benefit from downturns in the economy because of more business, but they have a greater risk of paying too much for receivables if the economy is deteriorating. Credit reporting is driven by the need for credit and financing, which are stronger when the economy is healthy.
Faulty Information, Identity Theft - As consumer information is more widely used to make credit decisions, credit companies face greater risk that their data is faulty or will be stolen or misused. Inappropriate disclosure of consumer information is a PR problem, may result in lawsuits, and may run afoul of privacy laws. More government regulation in this area is likely.
Industries Where Fitch Ratings Inc. Competes
- Financial Services
- Transaction, Credit & Collections
- Credit Reporting(primary)
- Transaction, Credit & Collections
- Insurance
- Risk Management
