COVID-19 is impacting every business in some way. In this communication, we aim to clarify our approach and how we will continue to support our customers in these unprecedented and uncertain times.
Given the uniqueness of the current situation and the availability of relevant historical data, models that accurately predict business outcomes can’t be created at the moment. Along with the effect of the economic slowdown we are working hard to analyse and share the impacts of Government actions such as the availability of new loans and the option of filing extensions for financial statements.
Risks to businesses will increase, not only due to late payments but also because of the continued existence of insolvent and potentially fraudulent businesses. So, throughout this period we aim to strike the right balance between protecting our customers from such risks whilst being fair with the scores that we assign to businesses so as not to disadvantage any of them unnecessarily. At present, we will not be amending our scores solely on the basis of changes in short term payment behaviour.
We believe there is significant value to our existing scores, ratings and limits. If a risk inherent in a business was high coming into the current situation then it is likely to worsen in the weeks and months to come. Likewise, if their risk was low and scores were high then it is likely that the business will be more resilient going forward. Our advice continues to be to use our solutions in association with other available information to ensure the fullest picture possible.
Over and above this position we have developed a new Impact Score that we recommend is used alongside our existing scores and ratings. Amongst other factors, this takes into account the impact of the geographical spread of the virus, sector specific risks and government policy. Used in combination, these tools will help in determining the best actions to mitigate risk through this difficult period.