Finland looked to Europe for ideas on how to implement a positive credit register

Finland is one of the few European countries that has not introduced a positive credit register yet. This will change in the spring of 2024, when the new national register will be launched. The data saved in the Positive credit register will give the lenders a more reliable picture of the loan applicants’ ability to pay, while helping to prevent over-indebtedness.

The register will be implemented by the Tax Administration's Incomes Register Unit, and the work is already well underway. Following a request for technical support submitted by the Finnish authorities, the European Commission conducted a comparative study on other credit registers established in a selected number of EU countries, with the support of KPMG. The analysis focused on technical implementation, legislation and change management. Based on the collected information and results, we can better identify and prepare for the risks related to the building and introduction of the register in Finland. This will help us ensure the successful implementation of the register.

"We were particularly interested to learn what kind of change the register meant in other EU countries, how much time it took to carry out the change, how lenders were prepared for the change, what challenges were encountered and what we should prepare for. In addition, we learnt about the functionality, architecture and operation of the other countries’ registers, which helped create an overall picture,” says project manager Anniina Korhonen from the Tax Administration. “The Positive credit register is a new register in Finland, and the task is new for the Tax Administration. We wanted to learn what successful introduction of the register requires and to gather experiences from other countries that already have a similar register. We received valuable information and recommendations that we can put to good use when we implement the Positive credit register in Finland.”

The stakeholders’ level of readiness and the quality of information proved to be a challenge

The target countries selected for the study were Denmark, Latvia, Ireland and Belgium. The selection was based on a number of criteria, including the establishment and maintenance of the credit register by a public body, and the high level of automation and digitalization. Other important points considered were the functionality of the register and the way it operates – for example, that the data are collected in a centralised register.

The operating principles of the registers were slightly different in each country. As regards the building of a register, however, common challenges could be identified.

"There were two key findings in the study: the stakeholders were technically not ready in all respects at the time of introduction and there were some defects in the quality of the information reported," says Anniina Korhonen. "We learnt a lot from the experiences of other controllers, and we will put these lessons to good use in Finland. We engage in an active dialogue with our stakeholders and reserve time for testing to make sure that the information reported is of high quality and reported at the right time.”

Korhonen underlines that it is important that stakeholders know what the law says about the information content to be reported and what information they must report. "We must make sure the information to be reported is saved in the lenders' systems in the required format. This is an entirely new reporting flow, and it requires changes to the lenders’ systems. However, it is in everyone’s interest that we receive high-quality information in the register,” says Anniina Korhonen.

Active stakeholder work and communication in a key role

“The register’s key stakeholders, i.e. the lenders and the software houses responsible for their systems, were engaged in the project at an early stage in Finland,” says Sanna Karvinen, who is in charge of the Positive credit register’s stakeholder cooperation.

“The cooperation with stakeholders started as early as autumn 2020. Since spring 2021, we have organised events on a regular basis, keeping our stakeholders up to date of the project’s progress and giving information about what lenders should prepare for and on what schedule,” says Karvinen.

"We collect comments and information from our stakeholders for use in the preparations, and we make every effort to maintain an active dialogue. For example, we send instructions and technical API descriptions to stakeholders for comments, hoping they will give us feedback and draw our attention to challenges that we should address. Our goal is to build a register that serves its users in the best possible way.”

The comparative study was funded by the European Commission's Directorate-General for Structural Reform Support and carried out by KPMG.