REGISTER OÜ operates in the world of data and like the rest of the world around us, it is changing faster than we could have ever imagined. The only thing that remains the same is the state apparatus – with wheels turning at such a speed it becomes impossible to tell – is it actually going forwards or backwards? The talk of cutting back on the number of civil servants has not died down for the past eight years – still harping on with no chance of a break: ‘Dear government, please stop wasting resources and free up some valuable workforce for our economy.’
The dangers of the development of technology and data
Then, we read the news on technologies developing at head-spinning speeds, changing the world beyond recognition. The leaders of the world have called for a ban on the production of lethal autonomous weapons or ‘killer robots’. Opening such a Pandora’s box was predicted already by Baba Vanga, the Bulgarian clairvoyant, in her time – that people would become living robots.
Even in our own little Estonia, this field of activity is being tapped by a company building unmanned round vehicles that can carry weapon systems. There’s a scary thought, eh?!
But at the same time, this company is developing robots for fire and rescue applications, which can also be used in agriculture and mining. Awesome stuff, isn’t it?!
This means that this mystical robot based on artificial intelligence and machine-learning can have an astounding effect in changing our lives for the better or for the worse. The direction is for man to choose, with the orders we give. The only thing the robot must not do is think for itself. The human should always remain in charge and that is the concern and request of the world leaders – let us make the world a better place, but not lose control.
The power of data has a similar, if not even a bigger weight in today’s world. Data enables smart IT solutions, and these have a positive effect on our lives, businesses, relationships, health etc.
- In 2017, the world produced 2.5 quintillion bits of information every day. Since technological advances are knocking on the door in every walk of life, these numbers are soaring fast. And the growth is measured not in percentages, but times. At that, 90% of data in the world has been created in only the last two years.
- A study by the European Commission (2015) forecast that in 2016, the open data market in EU countries (28+) would amount to 55.3 billion euros. In 2016-2020, the market volume is predicted to grow by 36.9%, reaching 75.7 billion euros by 2020. In 2016-2020, direct cumulative market volume is estimated at 325 billion euros.
There is no doubt that business based on data is the fastest growing field in the world, and whether it is bound to change the world for the better or worse, depends on the objectives of the people.
But the power of data carries great dangers – the threat to damage man’s reputation, defame someone’s good name, steal someone’s identity etc. The data protection reform began already in 2012 and was formed into GDPR in 5 years.
To sum it all up, in our rapidly developing IT era, two cries for help are predominant. On the one hand, world leaders with their request to stop independent killer robots and on the other, the EU-wide General Data Protection Regulation with its message – protect private citizens and use their data in a safe and regulated manner.
In both cases, there are two sides to the coin – one very good and one very bad, depending on our ultimate goal.
Immense power of data, put to immensely good use
REGISTER OÜ manages the portal Inforegister that also deals with data – namely, developing analytical models based on data. At that, our own development is rather rapid, too – everything we earn, we re-invest in development..
In the bigger picture, our goal is to make Estonian economic environment more transparent, fair and competitive. In the more close-up shot, we develop products that enhance enterprises’ business processes – reduce their resource costs, prevent damages and increase profits.
EXAMPLE of a business process, a relic of the olden days, but still used in plenty of companies
- The company has a turnover of roughly 1,000,000€ a year.
- It has 3,000 clients, half of them regular customers.
- Around 50 new customers are accrued every month, on average, the company issues 500 invoices a month.
- A minimum of 20% of payments are late and hopeless claims are written off to a level of an estimated 1.5% of the turnover.
A company of this size typically employs a credit controller specialist with payroll costs around 2500€ a month, whose job description includes concluding out background checks on new customers, checking regular customers before new transactions, and carrying out background checks on clients overdue on their invoices, and communication with such clients.
On average, it takes the credit controller 10 minutes to deal with one customer.
A quick calculation shows us that the credit controller will spend 8 hours a month on researching new customers, 83 hours on checking returning customers, and 18 hours on dealing with debtors.
The company will spend 30,000€ per annum on hiring the specialist, 15,000€ on written-off claims, around 10,000€ on indirect expenses. This adds up to 55,000€ a year of expenses for the company. Thanks to the specialist at work, the company wrote off around 7 invoices per month – without this person, the number would have been 2.5 times higher, reducing the company’s profit by 85,000€ a year. There’s a scary thought, isn’t it?!
The modern smart solution would be for the company not to do any such handicraft at all, and not write anything off either. Awesome stuff, isn’t it?! Register OÜ has created the following smart solutions based on data and analytics:
1. Inforegister’s data interface API and Credit Score
The solution would be to use Inforegister’s API instead of the old relic. The data interface enables getting updates (real-time or request-based) as linked data, for example adding the Credit Score straight into your systems and therefore eradicating the need for manual work.
Moreover, a human cannot detect all the danger signs when completing a background check. In addition, any risk assessment and perception of risks is dependent on the person’s convictions and knowledge, which may not be objective. Inforegister’s Credit Score is an analytical model created by top scientists using machine-learning methods that can predict the possibility of a company’s insolvency or facing compulsory dissolution in the next 12 months with 99.5% accuracy and expresses the maximum probability of the assessed company not meeting its obligations to creditors. The model uses close to 200 variables and this kind of precision can never be achieved by the human eye, brain, or any other organ.
There is actually no need to spend manpower and time on checks and monitoring. There is actually no difference whether your client base comprises 10, 100 or 10,000 companies. The whole client portfolio on the palm of your hand without a cent in costs when you use a smart IT solution.
If you want to be smart too, start using Inforegister’s Credit Score and open data, it is all set up for you!
- Register API represented Estonia as a finalist in the international SEMANTiCS linked data competition. The SEMANTiCS 2015 conference focused on Big Data and the use of linked data in private entrepreneurship, e-commerce, the public sector and research and development.
- Credit Score has received mention in the conference papers of the internationally acclaimed science conference CAiSE. The publication is accessible here: “Business Credit Scoring of Estonian Organizations’’.
Numerable companies have interfaced Credit Score to their systems and it does not matter whether you are a large or small enterprise – this option is open for all!
2. The model for predicting corruption
Register OÜ’s team of data scientists has developed a mechanism for identifying and preventing corruption in both the private and public sector that actually works. It does not take millions of euros or a paid army to eradicate corruption in Estonia. There is no need to keep up the pretence that we can influence people to give up any rewards with only ethics. The model is set to go and only awaits the bold decision to implement it. Sooner or later, it is bound to happen, so why wait? Read more here
3. Business media channel Score Storybook
Inforegister has for some time now been working in tandem with a new business media channel – – www.scorestorybook.ee , the creative incubator of analytical models. Every morning, a journalist will have on his/her desk a set of data (events), a symbiosis of man’s input and artificial intelligence. The data journalist then creates an article based on the data set.
Next, all man-made articles are analysed by artificial intelligence, identifying patterns, relations, motives, and logical reasoning. Based on this, a raw standard article is created for the journalist – a pre-fabricate for an article. The journalist can make use of the freed up time to perfect fresh opinions and lines of thought. In this sort of co-operation between the journalist and the robot the article is perfected, working towards the goal of creating from the machine-learning-method-based pre-fabricate a complete product – an automatic article. Today, around one million automatic articles have been published about Estonian enterprises.
Storybook will be launched on August 31st, 2019 and a preview of designs is available HERE
4. Credit insurance
Register OÜ belongs to Kreedix Group that also provides credit insurance mediation. KREEDIX KINDLUSTUSMAAKLER OÜ is on the Estonian Financial Supervision and Resolution Authority list of insurance intermediaries. We would not be in this business without superior quality data. Kreedix began developing an extraordinary credit product this spring, one in which the price tag is not based on the turnover, as we are used to, but based on pending risk. This means that the price of credit insurance does not depend on the company’s annual turnover, but on the amount of current receivables.
We are in active ongoing negotiations with international insurance funds with a keen interest in offering the whole economy of Estonia such an insurance cover that would substitute today’s exclusive credit insurance model for an efficient mass product. But the absolute precondition for this is quality data and strong analytics.
5. Inforegister is entering international markets
All of this has been in pre-meditated preparation for entering international markets. This autumn, the Register team will have their work cut out for them in defining the Inforegister 2.0 concept. The Credit Score is the main analytical model that will be used in Inforegister 2.0 both in Estonia and on international markets, but with the difference of creating a mechanism for assessing companies’ credit risk based solely on online data! For this, we initiated a new applied research project that focuses on automatic creation of such models. And the first results are in.
The goal is to create a rapidly scaling business model based on automatics: an automatic Credit Score in an automatic article, automatically available on any webpage I go to.
So, there’s the connection between Killer Robots and Inforegister, but what is the relation to the Data Protection Inspectorate?
As a representative of the state, the Data Protection Inspectorate has been monitoring the personal data available on information portals for over a year now and has repeatedly sent questions to all data processors; I received the most recent one only a few days ago.
One thing is clear – the names of representatives of a valid business undertaking are not in the scope of the Personal Data Protection Act.
But the Data Protection Inspectorate sees a source of possible conflict in two cases that may have some weight as data concerning a private person, and in some cases may fall under the Personal Data Protection Act:
- Data concerning representatives of valid companies, if this data is related to private information on the person as a natural person (e.g., insolvency, related immovables, media reports, Public Announcements data, tax arrears)
- Data regarding related persons of former companies, since the person is not able to influence the business activities of a former company.
The first point does not regard Inforegister since we do not gather or process private data on natural persons. Inforegister only processes the name, ID code and relation to companies. At that, the compulsory precondition is that the person has relations to business entities, ruling out the possibility of any personal data on Inforegister. Objectively, it can be said that a company does not complete transactions or take responsibility for them – it is the person that makes the choices and calls, and is responsible for them. If we were under the illusion that we could delete all persons – how could abstract business entities bear responsibility?
Regarding the second cause for concern, Inforegister builds on not the direct influence a board member can have on the economic activities of a former company, but something much more significant than that – the influence of the person’s free will to decide:
- shall I enter into a business relationship with a person that has transferred the last three companies to a ‘front’ or ‘straw man’?
- shall I enter into a working relationship with a company led by a person whose last three companies have ended in bankruptcy?
- shall I buy goods online from an e-shop if the former company of the same owner did not supply goods to me, because the company was left to decline?
Behaviour patterns, including history and connections between events play a vital role in all of Inforegister’s data based analytical models.
This plan of ‘treating the patient to death’ by removing all dangers does not support the goal – living
Just as we cannot assess the health of the whole forest by assessing the health of just one tree, we cannot assess the life expectancy of one tree if we do not know how much space it has to grow, the composition of the soil, the possible illnesses and dangers that may limit its life expectancy. Therefore, it is absolutely vital to limit all possible sources of danger from surrounding trees that may be sick and almost toppling over.
In essence, if we were to delete all history, it would mean the end of smart IT solutions as machines cannot learn without data. That would also mean the end of transparency in economy, which would limit competition and be fatal to economy.
Please let us not destroy our economy and ourselves – we have no gold, oil or tourism to fall back on!
All we have is smart people. Let them keep in step with the world in the rapidly developing field of IT – with its market share of an incredible 325 billion euros in the next four years!