The Reserve Bank of Australia (RBA) wants to probe the financial health of Australia’s giant unlisted companies sector, revealing it is seeking to get a better handle and far more timely data of the state of private company accounts as the national economy continues to sputter along.
Tender documents released by the central bank this week reveal it wants to get a window into the often opaque unlisted companies sector, with a view to having the data feed up and running as early as January next year.
The RBA’s approach to market is indicative of a wider trend across government to start tapping into increasingly real-time or near-time commercial data feeds to cross check traditional data collection sources like tax and company reporting data that deliver regularly, but tend to lag as indicators.
Commercial data brokers and services have existed for years, and range from the likes of illion (Dunn and Bradstreet) which banks and businesses use for corporate credit checks and risk scoring to payment card companies and consultancies.
What’s changed in the last five or so years is that many smaller and unlisted businesses have moved to cloud-based accounting systems – like Xero, MYOB, Reckon and Tech One – that can provide aggregated visibility over business conditions for their subscribers as a value added service.
At the same time, cloud-based accounting software firms have been taking the fight up to established on-premises providers (think SAP, Oracle) over the Tax Office’s Single Touch Payroll that requires wage and contractor payment data to come across as money is put into accounts.
It now looks like the RBA wants a bigger window into that world to give it a richer clearer, faster and more granular view of economic conditions. So it’s holding a beauty pageant for suppliers to strut their stuff and, presumably, get a bit more bang for its big data buck.
“The Bank is seeking to subscribe to a data set on unlisted businesses that best matches its existing requirements for monitoring the financial health and activity of unlisted businesses,” the RBA’s tender documents say, noting it’s keen on slicing by industry type and “historical balance sheet and income statement data.”
“The Bank’s key areas of interest are calculating ratios commonly used to assess the financial health of businesses. These include profitability, liquidity coverage ratios, gearing and interest coverage ratios,” the RBA says, which is all pretty logical.
The central bank also notes “the data may also be used on occasion to inform monetary policy, such as by monitoring trends and activity in the unlisted business sector” before calling out for “proposals from Tenderers that include options for innovative data relevant to monitoring the financial health of unlisted businesses in a timely manner.”
It’s understood the RBA has had conventional data feeds for some time, but is keen to test the market for new sources and insights as they become available.
“The financial health of the business sector is a consideration for financial stability and the ability of businesses to repay their debt obligations. The Bank therefore relies on accurate and timely business sector data and research to ensure that its analysis reflects all available information,” the RBA documents say.
The tender closes on December 13th.