Credit reports, an old meat and potatoes tool in the management of export finance, have been getting a new look and a new role. Partly, it's been a response to the Internet, partly to the demands of the Patriot Act, and partly to the global restructuring of both the reports industry and the credit insurance field.

The Internet has been changing the face of credit reports for nearly a decade. For exporters that use suppliers like Dun & Bradstreet, the U.S. giant in the field, or COFACE, the French international credit management firm, accessing information on foreign buyers now usually takes seconds, and the size of the databases available is massive.

But, web-based services have brought more than speed and efficiency (the old days of stuffing reports in envelopes are gone forever). Some suppliers have also combined basic reports, raw data, with "scoring," which means the exporter can get an additional service that places a risk rating on the buyer, and even a suggested credit limit. COFACE, based in Paris (with a sizable U.S. presence), and Dun & Bradstreet offer this capability.

Still, not all credit reporting services have gone the automated route. Several leading firms continue to specialize in custom reports that are prepared in several days, but distributed through e-mail.

The Patriot Act's shadow

Meanwhile, the growing shadow of government regulation has generated a sizable expansion in the need for business information on overseas buyers and business partners. This data goes beyond the traditional parameters of credit reports, delving particularly into the background of the principals involved.

The Patriot Act, which was created in response to the September 11 terrorist attack, has been the most visible, and burdensome, source of additional responsibilities. Exporters, now more than ever, have to "know their customers." The focus has been broadened from a fight against money laundering to include the fight against terrorists.

This has produced some reversal of the 1990s trend toward building an automated reports model. "We are seeing a trend toward investigative reports, beyond just credit information," says John Twomey, executive VP at Kreller Business Information. "And it's not only the Patriot Act, companies want to know if their customer has appeared in the Foreign Corrupt Practices Act list as well."

Growing government demands for transparency concerning the parties to a transaction have brought a boost to the credit reporting firms, who are the logical providers of the expanded information. They have both an existing pool of data and a network of information resources (local agents and affiliates) that can find and assemble the additional profiles.

Global consolidation

But, consolidation among the credit information suppliers has also reshaped the look of the field. Dun & Bradstreet, long the towering presence in the U.S., expanded in Asia and Latin America during the 1990s, often through buying up local credit reporting agencies. It claims to have a global database on 64 million businesses, including 13 million in the U.S., and 150,000 clients that rely on its information products.

The fastest growing player in the field, however, has been COFACE, which delivers both credit information and credit insurance, sometimes separately, sometimes together. The Paris-based company has its own offices and subsidiaries worldwide, as well as a large network of alliances with local firms.

The homegrown U.S. credit reports suppliers, then, include Dun & Bradstreet, Kreller Business Information Group, and Owens Online.