Ever get the feeling you're being watched? You could be sensing the gaze of Equifax. One of the top credit bureaus in the US (Experian and TransUnion are the others), Equifax provides consumer credit scores, credit histories, and risk analysis to lenders and others. The company collects data on more than 500 million consumers and 80 million businesses around the world. Through its workforce solutions unit, Equifax provides outsourced payroll and human resources services. The company also offers subscription-based credit monitoring for consumers. Clients include financial institutions, retailers, automotive dealers, and mortgage companies. Equifax operates in North America, Latin America, and Europe.
Although the majority of its revenues come from the US, Equifax has targeted such emerging markets as Latin America. Fast-growing economies have a need for the company's offerings but the infrastructure for consumer credit reporting is nascent. Brazil is the company's fourth-largest market, after the US, Canada, and the UK. In 2011 Equifax's Brazilian subsidiary merged its credit reporting operations with Boa Vista Servicos, the second-largest consumer credit bureau in that country. The deal strengthened Equifax's presence in Brazil. Also in 2011 Equifax acquired credit information provider DATUM in Costa Rica. The move helped develop the Equifax's position beyond financial markets and into the telecommunications field.
Other target markets for growth include India, Russia, where demand for credit informaiton is growing. In India Equifax has established a credit reporting business through joint ventures with six Indian banks. In Russia, Equifax owns a minority stake in Global Payments Credit Services, which operates as Equifax Credit Services.
In the UK Equifax also is working to advance its capabilities. In 2011 the company acquired Workload Financial Business Consultants, a UK-based provider of strategic intelligence for wealth and financial advisors. The deal added to the company's partnership with FICO. Equifax teams with FICO in the UK to offer risk management services to banking, insurance, retail, and other industries.
In the mature US market, Equifax's strategy for growth includes buying firms that are active in areas beyond financial markets. Through such deals, the company has entered direct marketing, business process outsourcing, risk management, and other auxiliary businesses. The strategy also helps boost revenues when the credit markets fall and its core business takes a hit. In 2010 the company acquired online authentication software firm Anakam to enhance its technology and analytical services.
In 2011 Equifax bought eThority, which makes data software for hospitals and other institutions; eThority will become part of its consumer, commercial, and workforce solutions segment. In another 2011 acquisition Equifax bought DataVision Resources, a provider of data and business services for the mortgage, insurance, and financial services industries. It too will enhance the company's ability to offer new solutions for customers, specifically those who purchase Equifax's employment and income verification products.
Equifax also shapes itself by divesting noncore units that prove too costly or otherwise expendable. In 2010 the company sold its direct marketing services unit, which provided consumer demographic data, to Alliance Data Systems for $117 million. In 2012 it also sold loan origination business APPRO for some $72 million.
In addition to acquisitions and divestures, Equifax focuses on new product innovation to drive growth. In 2011, 69 new products were launched by Equifax, contributing more than $180 million in revenue.
The company's strategies have helped it perform well even during uncertain economic conditions. Equifax meets a growing demand for data-driven decision making tools as people and businesses seek to more carefully calculate risk. In 2011 revenue was up more than 5%. Growth, especially in Equifax's consumer business was helped as banks loosened credit and began offering more loans. However, annual profit fell by more than 12%. Results were impacted that year after Equifax deconsolidated its Brazilian operations. – less
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