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SCMP Reporter

In the wake of rising public concern over whether banks will be allowed to share positive credit data, software vendor Sybase Hong Kong yesterday called for formal standards to be set over data exchange and the submission of information.

The database firm said credit reference agents, which could be either government agencies or a private positive data bureau, should work out codes of practice for the banking industry to follow as soon as possible.

Sybase Hong Kong's principal consultant Eric Pang said: 'Someone should take the initiative in the industry so it will be easier for future data integration.'

He said standard codes should detail channels for data submission, encryption of data and other security issues.

At present, banks employ their own methods to store and maintain customer data.

'Each bank is like a little kingdom that has its own rules and ways for a certain degree of integration over the database level and application level,' Mr Pang said.

But Sybase believed once the Government gave the green light to launch a positive data bureau, there would be no technological difficulty in building a common platform, he said.

According to Sybase general manager Michael Tsui, the securities industry used a de facto communication protocol called financial information exchange protocol (Fix) for the electronic exchange of orders.

'Though the Fix may not be suitable for banks over the issue of positive data sharing, it shows it is absolutely possible to have 'primitive data' exchanged over a common platform,' Mr Tsui said.

Mr Tsui was referring to the Hong Kong Monetary Authority, and said the primitive data to be shared included basic information such as how many credit cards a customer owned and whether he had a proven record in paying bills on time.

'Theoretically, it will be as simple as inputting data into Excel. I believe many banks already have their own database and platform to have communication and exchanging data between different branches and departments,' he said.

There have been rising concerns over the proposal to allow financial institutions to share more information about customers' credit-card histories.

The rate of bad debt on credit cards reached a record high of 9.04 per cent for the first three months of this year, with banks writing off an estimated HK$5.45 billion.

The number of bankruptcy petitions increased from 1,752 in December to 2,223 last month. The total number of petitions reached 8,246 in the first four months of this year, more than half of last year's total of 13,186.

The Privacy Commission recently expressed its intention to set up a positive data bureau this year, enabling banks to operate with more vigilance when processing credit-card and loan applications.

'There is a need for banks to share the positive information of their customers in order to lower their risk and loss from bad debts and write-offs,' Mr Tsui said.

Privately owned Credit Information Services provides credit reports detailing so-called negative data for local banks, finance companies and credit-card centres. It aims to help companies reduce and manage their credit risks.

Mr Tsui believed the quality of security and technology in Hong Kong was mature enough to manage an Internet-based positive credit database.

'With a local certification authority and successful examples in online broking and transaction, the public should not be worried,' he said.



Sybase calls for standard data codes