Experian 2013 Annual Report Download - page 31
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Please find page 31 of the 2013 Experian annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.EXPOSURE TO LEGISLATION OR REGULATORY REFORMS
Performance indicator
EBIT and ROCE
Strategic alignment
• Expanding geographically
• Product innovation
Description of risk and potential impact
Legislative, regulatory and judicial systems in the countries in which we
operate are responding to public concerns about how consumer information
is collected and used for marketing, risk management and fraud detection
purposes. These concerns may result in new laws, regulations and
enforcement practices, or pressure upon industries to adopt new procedures
or self-regulation. Some potential changes, especially due to increased
examination oversight by regulators, could adversely affect our ability to
undertake these activities in a cost-effective manner or could reduce revenue
resulting from modified business practices. Regulatory oversight of data
security processes and policies is particularly acute. Separately, we are
subject to changes in specific countries’ tax laws. Our future effective tax
rates may be adversely affected by changes in tax laws.
How we manage this risk
We continue to educate lawmakers, regulators, consumer and privacy
advocates, industry trade groups and other stakeholders in the public policy
debate. We have launched specific programmes to manage increased
examination oversight. We also retain internal and external tax professionals
that monitor the likelihood of future tax changes. These risks are generally
outside our control.
Change from 2012
Increasing risk
2013 update
A revision of the 1995 European
Union Data Protection Directive
is currently being considered by
European legislatures. The revision
may include more stringent operating
requirements for data processors
and significant penalties for non-
compliance.
In the US and certain Latin American
countries, legislation regarding the
availability or use of consumer and
commercial data continues to be
discussed. These proposals have
in some cases had the potential
to expand the availability or uses
of information and in other cases
have the potential to restrict the
availability or use of information we
currently maintain. Regulators and
legislators have opened inquiries into
our operations as a marketing data
broker, but it is uncertain whether
new laws will be adopted. More likely,
self-regulatory systems will need to
be enhanced.
REGULATORY COMPLIANCE
Performance indicator
EBIT and general litigation
trends
Strategic alignment
• Expanding geographically
• Product innovation
Description of risk and potential impact
We must monitor and comply with international, federal, regional, provincial,
state and other jurisdictional regulations and best practice, including but
not limited to privacy, consumer data protection, health and safety, tax,
labour, environmental, anti-corruption and information security laws. These
regulations differ from region to region, are complex, change frequently,
may be inconsistently applied and interpreted and have tended to become
more stringent over time. We have in the past and may be required to incur
significant expenses to comply with these regulations. Any failure by us to
comply with applicable government regulations could also result in cessation
of operations or portions of operations or impositions of fines and restrictions
on our ability to carry on or expand our operations.
How we manage this risk
Our regulatory compliance departments work closely with our businesses to
identify and adopt strategies to help ensure compliance with jurisdictional
regulations and identified business ethics that include active monitoring of
our collection and use of personal data. To the best of our knowledge, we are
in compliance with data protection requirements in each jurisdiction in which
we operate.
Change from 2012
Increasing risk
2013 update
The new Consumer Financial
Protection Bureau (‘CFPB’)
commenced regulatory oversight of
our US Credit Services businesses
in September 2012. The CFPB is
the US federal agency that holds
primary responsibility for regulating
consumer protection with regards to
financial products and services. In
this role, the CFPB has the authority
to write and enforce rules, conduct
examinations, and collect and track
consumer complaints.
PRODUCT/SERVICE OR TECHNOLOGY OBSOLESCENCE
Performance indicator
EBIT and ROCE
Strategic alignment
• Product innovation
Further information
• Business overview
section – examples of
how businesses are
delivering innovative
solutions
• Our strategy for
growth section –
examples of product
innovation
• Business overview
section – discussion of
how we extend our global
lead through product
innovation
Description of risk and potential impact
The markets for our products and services are characterised by technological
changes, frequent introduction of new services and evolving industry
standards. Advances in technology may result in changing consumer
preferences for products, services and delivery formats and any such change
in preference can be rapid. In order to keep pace with customer demands
for increasingly sophisticated service offerings, to sustain expansion into
growth industries and to maintain its profitability, we must continue to
innovate and introduce new products and services to the market. Without
continued investment in our technology infrastructure, we may not be able
to support changes in the way our businesses and customers use and
purchase information.
How we manage this risk
Product innovation is a key driver of growth for us in all our markets.
Detailed competitive and market analyses are performed that provide the
foundation of a rigorous product and services investment identification and
selection process.
Change from 2012
Stable
2013 update
We continue to invest strongly in
new data sources and new analytical
products, together with the platforms
that support their worldwide delivery.
Over 10% of our revenues come
from new products developed in the
past five years. In addition, 20% of
our global costs are in information
technology and data.
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Business overview Business review Governance Financial statements