The Demyst Team

The Demyst Team

February 24, 2022

OpenCorporates Spotlight: Data Transparency Deep Dive

OpenCorporates Companies and Officer Search provides transparent company data for risk management processes, which include third-party risk management and verification for Know Your Customer (KYC) onboarding and ongoing monitoring.

Simone Spencer, Vice President of Marketing at Demyst, talked with Shanti Salas, Vice President for North America at OpenCorporates, to discuss how transparent data can justify risk-based decisions with clear, current information.

Their conversation follows. 

Simone Spencer: Can you start by giving us an explanation of transparent company data? 

Shanti Salas: Transparent company data has three key qualities.

  • Traceability 

First, it is collected only from official public sources, and is traceable back to these sources – providing a clear line of sight on where it came from and when it was collected.

  • Single standardised schema

Second, it is unified in one place according to a single, standardised schema. Users of company data shouldn’t have to grapple with hundreds of schemas with different quirks from individual company registers around the world. Nor should they need to deal with different vendors to acquire each dataset. It is much easier to rely on a single source to do the heavy lifting to provide an easily understandable snapshot of the world’s companies as data.

  • Fresh reflection of official company registers

Finally, it should be up-to-date and a faithful reflection of the official company registers. We strive to bring down as much as possible the time between a company being incorporated, then appearing in the register, and finally appearing in our database.

Professionals in organisations of all kinds use company data for a vast range of activities, but why should they care that it’s transparent? Ultimately, transparency gives them defensibility. If they know where and when their data came from, they can justify and stand behind risk-based decisions. 

Decisions are more defensible – and almost always better – when based on clearly traceable and up-to-date information from official sources.

Spencer: And how does OpenCorporates gather transparent data? 

Salas: We only collect company data from official sources to ensure transparency and quality. Our dataset has a clearly defined model that uses the official record of legal entities to identify companies. This sets us apart from many legacy business information providers who use inconsistent models. They often identify companies by vague proxies like their name or their address.

We are increasingly gathering our data by automated means. This lets our users receive updates to company information as soon as possible after the changes take effect in the register. By contrast, legacy providers often rely on data that is manually keyed in, or buy and resell data from each other rather than official sources. 

Spencer: Automation does sound like a way to increase accuracy and efficiency. How can transparent company data be used for risk management purposes? 

Salas: Transparent company data is critical to any company’s risk management processes. It supports: verification for Know Your Customer (KYC) onboarding and ongoing monitoring, supply chain and third party risk management, investigations and master data management.

Many clients tell me they use our data as a foundational layer – a golden source – on top of which other data sources are then layered.

Spencer: Is freshness important for a foundational layer of data?

Salas: The universe of companies is in constant flux. Thousands of incorporations and dissolutions take place every day, as well as changes to companies’ directors and key characteristics. It’s only ramping up as companies are increasingly being created in an automated fashion.

This means the third parties you need to monitor are changing too. To make the most informed risk management decisions, one needs data that accurately reflects the official company register as it stands today – not months ago when a legacy vendor might have acquired its data. Without fresh data, risk professionals might unwittingly risk-rate a customer lower risk than is really warranted, or miss a red flag in an investigation, exposing them to greater risk.

Spencer: How have expectations changed for company data in a post-pandemic world?

Salas: Fraud has been a particularly salient topic in the last two years. Astronomical figures are said to have been fraudulently claimed in Covid-19 business relief funds. This has brought with it a realisation that company data is pivotal in tackling fraud. For example, high-profile investigations by the Miami Herald and The Times exposed alleged misuse of this funding in the US and the UK, respectively. 

I’m proud to say that both investigations were powered by OpenCorporates data. In fact, this is part of a general trend: more organisations are seeing the value of having a foundational set of company data to underpin how they generate insights for all kinds of use cases.

What does that mean for transparent company data? Well, people now (rightly) expect it to be available in a way that can be easily used to solve real-world problems, not siloed in hundreds of individual company registers.

Spencer: The investigations powered by OpenCorporates data did a lot to expose the misuse of business relief funds. What do you expect the future landscape for transparent data to look like? Any trends to keep an eye out for in 2022 and beyond? 

Salas: The continued rise of transparent company data will be the clearest trend in 2022. More and more organisations are coming to us looking to use our traceable, fresh, well-modelled data to underpin their risk management activities.

Another positive trend is that countries around the world continue to open access to their company data. There was good progress in Illinois recently, where a bill was passed to make its previously restrictive Secretary of State data open to the public. 

There is also greater focus on company data being released in a structured and usable way. Illinois’ Secretary of State will provide it in a machine-readable format, and we hope the EU’s Open Data Directive will also prioritise ease of use. Transparent company data is good for business, and good for the whole world.

Spencer: Thank you for your time today. OpenCorporates data is available through the Demyst platform and can be used to increase the effectiveness of firmographics research and to understand the universe of companies for KYB and other risk management purposes

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