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.
In conjunction with the Impact Score we recommend using our Financial Health Check which provides a snapshot dataset enabling customers to identify the risk in their customer and supplier portfolios combining our existing scores and ratings with the new Impact Score. On specific concerns, we also recommend customers undertake Fresh Investigations to understand the most up to date view of their risks - this is a service that Graydon offers via its dedicated team of highly experienced financial analysts. Additionally, we have recently launched Graydon Forensic Investigations that provides an in-depth AI-driven intelligence report, coupled with analyst insights for making decisions on unusually high value or potentially higher risk deals.
In conclusion, we are committed to continuing to support and protect our customers during these challenging times whilst ensuring that we assign appropriate risk assessments to UK businesses. We will continue to monitor the situation closely and to listen to our customers to understand what further actions may be required.
Thank you for your continued trust in our services. We hope that both you and your businesses stay healthy during this period.
Managing Director, Graydon UK Ltd