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Credit Risk Glossary

Credit Risk Glossary

What is KYC?

Know Your Customer – due diligence that businesses must perform in certain circumstances that govern the collection of relevant information from their clients. Initially focused on financial institutions, the range of companies affected has grown significantly. KYC terminology is also used in reference to AML regulations.

Red Flag Alert offers a KYC solution that uses the most up-to-date available information to ensure you are compliant with regulations.

What is the FCA?

Financial Conduct Authority – a financial regulatory body that is financed by membership fees. It regulates financial firms that sell consumer products and aims to maintain the integrity of the UK financial markets.

What is the ICO?

Information Commissioner’s Office – reports directly to Parliament with a mission to “uphold information rights in the public interest promoting openness by public bodies and data privacy for individuals”. Since the inception of GDPR and a greater focus on data privacy, it has had an enhanced profile.

What is MDM?

Master Data Management – a method that defines and manages the critical information a business holds into one single point of reference. MDM has become more relevant in recent years as regulations have increased and businesses are holding more data, often across multiple systems and locations.

Red Flag Alert’s business database is the perfect tool for ensuring solid MDM practices. By integrating real-time business data into their database, an organisation can ensure that their data is up to date. This hurdles one of the big barriers to solid MDM – updating information. 

What is AML?

Anti Money Laundering – a set of fairly stringent legal controls that place a responsibility on financial institutions and other regulated industries to monitor money laundering. With a renewed focus on terrorist financing and the new AMLD4 regulations, businesses have even more responsibility to get these controls right.

Red Flag Alert has a dedicated AML service that helps businesses ensure they’re using data that has been rigorously checked.

What is AML4D?

Fourth Anti Money Laundering Directive – designed to make companies more accountable for connections they have to money laundering. Compared to AMLD3 it covers more industries, places more emphasis on risk, increases checks on high-risk countries, has more stringent sanctions and enhances focus on beneficial ownership.

Red Flag Alert’s anti-money laundering service is AML4D compliant.

What is CRM?

Customer Relationship Management – the strategy a business develops to manage key relationships, including tactics to improve customer service, close more sales, shorten the sales cycle and many more.

Data is a key component of an effective CRM. Without accurate data on customers, businesses aren’t able to effectively deliver the myriad tactics their CRM offers. Red Flag Alert’s real-time business intelligence can be integrated into all leading CRMs using our API.

What is an API?

Application Programming Interface – a set of protocols for building software applications that allows two applications to talk to each other. The API delivers a request to a provider and then delivers a response.

The Red Flag Alert API allows users to integrate Red Flag Alert’s data directly into their CRM. This functionality means that a business can ensure its data is completely up to date and consistent across the organisation.

What is GDPR?

General Data Protection Regulation – a legal framework with guidelines on the collection and processing of individuals’ data within the EU. It came into force in May 2018 to much fanfare and is  considered a big step change towards more data rights for individuals.

A big part of GDPR is having a clear handle on the data you hold. By plugging your CRM into the Red Flag Alert database, you can be sure that your data is completely up to date – a critical step in GDPR compliance.

What are PEPs?

Politically Exposed Persons – someone who holds high public office. PEPs present a high risk for involvement in bribery due to the influence they can wield.

There have recently been enhanced guidelines on the treatment of PEPs; the Red Flag Alert PEPs and sanctions database is fully compliant with the latest regulations.

What is a CVA?

Company Voluntary Arrangement – an insolvency process that allows a company that is either insolvent or has debt issues to reach an agreement with creditors regarding repayment of its debts. CVAs are seen as controversial because they can leave creditors, particularly landlords, in a position where they have little choice but to accept poor repayment terms.

Red Flag Alert’s financial health rating gives you an accurate view of the likelihood of insolvency for any business in the UK. This gives you a very specific time frame for possible insolvency so you will have information about this long before it materialises, giving you critical time to act and avoid bad debt.

What are CCJs?

County Court Judgments – an order from the County Court to pay a debt; having CCJs on a credit file can affect the ability to obtain credit.

Red Flag Alert use CCJs as one of the tools to determine whether a business is likely to become insolvent. Although this is important, we also use 100+ other industry-specific indicators to give you the best view possible of the likelihood of insolvency.

What is B2B?

Business to Business Sales – refers to a business that is selling a product or service to other businesses rather than consumers.

Using Red Flag Alert can supercharge your B2B sales operation. We have up-to-date information on 6.5 million businesses and 20 million decision-makers, with the data segmented across dozens of filters. This allows marketers to build highly targeted B2B outbound marketing lists that can dramatically increase sales and marketing efficiency.

What is EDD?

Enhanced Due Diligence – if there is an increased risk of money laundering or terrorist financing, EDD is employed. It is unsurprisingly a more detailed due diligence process to assess a high-risk situation.

EDD is a feature of Red Flag Alert’s AML service so we’ve got you covered on this.

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Contact

Red Flag Alert
302 Chambers Business Centre
Chapel Road, Hollinwood
Oldham
Greater Manchester
OL8 4QQ
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