The Swedish EQT Group is preparing to take over all shares in SCHUFA Holding AG, which is valued at 2 billion euros. However, major shareholders such as the savings banks and the Volks- und Raiffeisenbanken are trying to prevent this and ensure that everything remains as it is. This development is highly controversial under antitrust law. Data protectionists are also up in arms: what will happen to the data of 69 million German consumers if SCHUFA is controlled from abroad? The good news here is that things can hardly get any worse. SCHUFA Holding AG has been proven to work with a shockingly large proportion of false and outdated data. The calculation of the score value, which is vital for consumers, is deprived of any empirical verification and intersubjective traceability. The keyword here is secrecy. Why is this the case? Because leading data protection professors in Germany write expert reports stating that this business practice is in compliance with German law. However, one may doubt this. If one reads these reports, one might quickly suspect legal sloppiness. However, this sloppiness is rather atypical for the authors of these expert opinions, top-class professors who have been fighting for data privacy and consumer rights for decades. Does everything possibly have its price?
If you look at the European market for credit agencies, you can see that a company with a monopoly position often behaves like the axe in the forest in the respective country. In Germany, SCHUFA refuses to allow consumers to see how the SCHUFA score is generated and uses outdated data - simply because there is no real control.
There is no SCHUFA in the Czech Republic. The Italian CRIF Group is the market leader there. In Germany, CRIF has grown through the acquisition of the credit agency Bürgel, but it does not really play a role. The Czech branch of CRIF, for example, does not like it at all when consumers directly request the data to which they are entitled under DSGVO without using the kolikmam.cz website, which was set up specifically for this purpose and is subject to a fee. In 2021, CRIF found itself in such distress due to hundreds of requests for information via our partner portal kontrolaosbnichdat.cz that it simply cancelled the fax connection in order to avoid the requests for information. Since then, the faxes have been forwarded by us to the head office in Bologna, Italy - against the pleading request of the Czech CRIF support "please don't send fax to Bologna!" DSGVO is DSGVO after all. In the whole of Europe.
Experience shows that monopoly companies such as SCHUFA in Germany or CRIF in the Czech Republic are excellently wired in politics and business. If you look at the CVs of the people acting for the companies, you quickly see how close they are. This is not a bad thing per se, but it does indicate that their own career plans and the preservation of the status quo are closely aligned.
The current development of SCHUFA allows for two scenarios:
- EQT succeeds in acquiring a controlling number of shares, i.e. the right to restructure SCHUFA Holding AG according to its own ideas. Presumably, the first step will be to address the three areas of products, management and workflows. SCHUFA's products are currently suitable for the German market. Problems, on the other hand, are likely to arise in the workflows (keyword: quality of data collection and data storage). Here, international investors will take a very close look and insist on Europe-wide compliance with data protection standards. If only for the reason that for international expansion, the processes and standards in the target countries where the same legal framework applies (and this is the case in the EU) should be the same or at least similar. Therefore, in favor of scalability, one will dispense with minor impurities in the individual countries, such as the dubious lack of transparency in the SCHUFA score, will increase data quality, and will make a corporate policy for consumers. Why? Because companies that act against consumers do not generate sustainable profits. SCHUFA is currently successful economically only because of its sheer size and quasi-monopoly position. The German SCHUFA is not a blueprint for other countries. This will also be accompanied by a change in the company's management. The current management figures do not appear to be very suitable for a new start and will probably be available to the job market or politics after a takeover. For consumers, this development is therefore predominantly promising. Serious investors simply have no interest in breeding annoying data protection scandals and trust issues in every country.
- Assuming that the savings banks, cooperative banks and Raiffeisen banks succeed in preventing a takeover: little or nothing will change in terms of corporate policy, and major leaps in terms of digitization and improvement of data quality will probably fail to materialize due to a lack of know how and ambitious management. The current management in the manner of a lord of the manor and official style will continue - to the chagrin of consumers, who are in urgent need of clean data quality, because the following still applies in Germany: bad SCHUFA - no credit!
A study conducted by us in 2021 shows that the vast majority of Germans do not trust SCHUFA. Too many citizens have already had problems with incorrect or outdated SCHUFA entries. Regardless of who will now take over the management of SCHUFA: The main task will be to win the trust of the population. A slogan alone will not be enough - trust must be earned. Clean handling of sensitive data would be a good start.
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