Although publishing company Reed Elsevier’s $4.1 billion purchase of ChoicePoint was seen as an insurance sector move for the European publisher—and a field day for privacy advocates wary of a centralized data superpower—it could have major ramifications for the enterprise risk management trends for banks.
The Reed Elsevier plan is to merge ChoicePoint, with its mountainous accumulation of insurance claims data, with its legal and media-focused LexisNexis unit. But the cumulative personal data to be culled from both sides presents the “data powerhouse” that banks have been looking for as a linchpin of enterprise-decisioning tools, says TowerGroup cross-industry research director Virginia Garcia.
“It’s not just the opportunity that [Reed Elsevier] presents directly to the market. It’s the entire vendor ecosystem,” says Garcia, who puts the buy was on par financially with Fiserv’s $4.4 billion acquisition of CheckFree last year. “Companies like ChoicePoint and LexisNexis provide the tools that can be integrated into platforms banks are using for new account opening…and enterprise decision management is a bigger piece of the pie.”
Banks are under pressure from know-your-customer regulations and business-line demands for customer lifecycle management, and, consequently, are looking for better ways to gather reliable and actionable data.
Handy as that may be, the merger still requires federal approval.
