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Federated Credit Systems (Working Paper ): Unbundling the Credit Provision Business Model

Federated Credit Systems (Working Paper ): Unbundling the Credit Provision Business Model

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As an architectural design and information technology approach, federation has received increased attention in domains such as the medical sector (under the name federated analysis), in official statistics (under the name trusted data) and in mass computing devices (smartphones), under the name federated learning. In this (the first of series of three) white paper, we introduce and explore the concept of federated credit systems.

We introduce a number of fundamental business entities (sub-units) and their associated functions and discuss the underlying business models. We discuss, in particular, how and why they exchange data and metrics and the key risk management challenges of each. Finally, we sketch current architectures for credit information sharing with an overture to the new possibilities opening up with federation architectures.

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