Jennifer Baert - Head of Information & Credit Risk Assessment
Q. Euler Hermes is launching its online open data portal; why did the company decide to conduct this pioneering initiative and why now?
At Euler Hermes, data is key! The more data we have on companies, the more credit we can give to our policy holders. It is clear to us that if we want to stay relevant in our credit risk assessments but also to better serve our customers, we need to use more than traditional data. Open data is structured, reliable, can be re-used and allows to easily identify which company the data relates to, so it appeared as the perfect answer.
The more we were diving into open data, the more it was becoming obvious that we needed to share our own.
Q. Why do you give away something for free?
I would say it’s a corporate citizenship and collective intelligence project: there is so much potential and so much value to be created and we believe in the wisdom of the crowd. And it makes sense as we are in the business of trade credit insurance, which purpose is to support international trade. Also what goes around comes around: if we want to see more data being made available, we need to release ours as well.
Q. Euler Hermes calls for a “greater culture of data openness” in the corporate world. Are they a lot of companies that already have opened their data base like EH?
As first, it was mostly governments bodies or public authorities which were sharing their data. But now some banks, companies in the transport, media or utilities sectors have opened their portals as well. For instance, the World Bank, OECD, Airbus, Enedis and SNCF Reseau have all launched their platforms in recent years. Open data portals are slowly making their way into the corporate world even if the trend remains in its early stages.
Q. Aren’t you taking a risk by releasing Euler Hermes’ valuable data to market, clients and competitors?
It’s very important to understand that there is absolutely no confidentiality breach: we are not releasing any individual data. They all are anonymized then aggregated by trade sectors and / or by countries.
On a business side there is no threat either. Two years ago, we released our international collection country profiles explaining how to collect a debt in 50 countries, and there was no adverse consequence on our debt collection services, simply because it does not replace our collection know-how, our international presence and proximity to the debtors. Similarly, the open data portal will not replace our credit risk assessment, proximity to our policyholdersand credit management services.
Q. What kind of data can one expect to find on the platform and who will use it?
The risk information and credit risk assessment team at Euler Hermes noticed that a lot of open data portals were built for compliance purpose, but many datasets were actually never used. So when we decided to open our own portal, we looked for datasets that would be of interest to researchers. That’s why we reached out to Christophe Pérignon, Head of Research at HEC Paris Business School and his team. And they told us that trade flows and payment incidents between countries and by trade sectors were a good start.
So our first dataset’s goal is to help study trade flows between countries and payment incidents relating to those trade flows. All data are aggregated by sectors and countries. The dataset covers 218 countries or territories. It is therefore possible to compare between countries and trade sectors and to isolate certain trade sectors like the automotive sector.
Any researcher or company interested can use it for example for macroeconomics forecasting on flows, or to develop economic stress tests.
Q.Can you give us examples of ‘practical’ use?
On the platform, you can use data to find out how likely a German company exporting to China is to get paid and you can compare the result to how likely a Russian company (or from any other country). It also can be used the other way around with imports of course. This example was interesting because it showed us that Chinese companies pay Russian companies much faster than they pay European ones. Which probably illustrate strong bonds between China and Russia.
You can also see companies from the energy sector are more or less likely to get paid then the ones in the agricultural sector.
Q.EH says that open data “can lead to the creation of innovative businesses and services”. Can you give us a few concrete examples on how Euler Hermes’ data can be used beyond the corporate world?
We don’t have concrete example yet but that’s what open data is about: you make it available and someone might use it to innovate. It is important to keep in mind the different perspectives on open data through the world. While in Europe, the philosophy behind open data is more about corporate-citizenship, giving back to the community and doing research, in Asia open data is seen as a way to create new business and make profits in a closer environment.
A very good illustration of this is the organization for the promotion of open data in China called SODA that we collaborated with. SODA is called like this because they see data as coke in a closed can. Nothing happens if you keep it closed, but if you shake it and open it, then it will spill over and energy comes out. I like that analogy. SODA organizes open data hackathons, which are contests where data from public authorities and corporates are shared amongst participants who must come up with the best ideas and business cases based on these data.
Q. The first dataset will consist of around 1,800,000 data points collected over 3 years. Are more datasets coming?
We built this first dataset with HEC’s needs in mind. We would be happy to make more of our data available as this is just the first step for us.
At the beginning, open data was about making the data available. Now, we are starting to get more mature on the data opening initiative and the second stage of maturity is how data is going to be used. That is why we wait for requests to come in rather than make our data available because it is the ‘right thing’.
We want our data to be useful and we want to keep working with academics and anyone interested in international trade and hopefully create a community around company data and B2B trade to support international trade.