Annual Report 2017Kkb Annual Report Report 2017

KKB ANNUAL

ANNUAL REPORT 2017KKB ANNUAL REPORT REPORT 2017

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ESTABLISHED IN PARTNERSHIP WITH NINE LEADING BANKS IN THE INDUSTRY, KREDI KAYIT BÜROSU (KKB) CONTINUES TO ADD VALUE TO LIFE VIA RISK MANAGEMENT.

WHO ARE WE? 81 Letter of Guarantee Status Inquiry (LGSI) 07 About KKB 81 Trade Registry Sharing System (TRSS) 08 Shareholding Structure 83 Collection Scores 09 Vision, Mission and Strategies 83 Inclination Scores 10 Milestones 83 IBAN Validation Service 12 Financial and Operational Indicators 84 LCS Customer Objections Handling System (MIDES) 84 Fraud Attempt Detection and Prevention Service MANAGEMENT 85 Loans Analysis Portal (LAP) 19 Letter from the Chairman 86 Cheque Analysis Portal 21 Letter from the General Manager 87 KKB Unknown Number 24 Board of Directors 87 Loan Utilization Instant Sharing Service (KAPS) 28 Senior Management 30 Members 89 Our Products Provided to TBB Risk Center 32 Organizational Chart 90 Credit Limit-Credit Risk Inquiry and Information Sharing 90 Sharing Information about Protested Bills BUSINESS UNITS 90 Bounced Cheque Inquiry and Information Sharing 36 Information Technologies Department 90 Individual Cheque Inquiry IT System and Software Development 91 Credit Reference System (CRS) IT Service Management Unit 92 Corporate Bureau System (CBS) IT Project Management Unit 93 Customer Objections Handling System (MIDES) IT Infrastructure and Operation Unit 93 Data Verification System (DVS) 43 Marketing and Business Development Department 93 Cheque Report Raw Data Presentation Member Channel Management Unit 93 Risk Report Raw Data Presentation Product Management and Development Unit 95 Cross Cheque Relations Inquiry Corporate Communications Unit 95 Bounced Cheque Warning System CRM and Channel Management Unit 95 Inquiry and Warning about Entities Prohibited from Participation in Tenders Analytical Model Development Unit 95 Data Sharing about Derivative Transactions Sales Management Unit 96 Paid Bills Inquiry Service Findeks Sales Business Development Unit 96 Sharing Information about Cheques under Interim Injunction 49 Financial Reporting and Financial Affairs Department 96 Sharing Information about Companies that have Declared Bankruptcy/Sus- Financial Affairs and Contract Management Unit pended Bankruptcy/Debt Composition Budget and Reporting Unit 96 Sharing Service about Customers Banned from Using Cheques Procurement Management Unit 96 Customer RA Personal Record Search Service 51 Risk Center Coordination Department 97 Credit Insurance Inquiry and Sharing Risk Center Project and Product Development Unit 97 Risk Center Customer Report Service Business Intelligence and Reporting Unit 97 Acceptance & Rejection Notifications Related to Loan Applications 54 Internal Audit Department 97 Sharing of Internal Rating Scores IT Audit and Business Processes Audit Units 97 Credit Rating Agencies (CRAS) and Sharing of Rating Scores Member Audit Analysis and Coordination Unit 97 Data Updating Application 55 Risk Management Department 97 Data Validation and Sanction Application 57 Human Resources Department 98 Official Institution and Customer Information Request Services 58 Communication Center Department 98 Member Request Management Services Member Communication Center (MCC) 98 Risk Center Bulletin and Statistics Publication Services Customer Communication Center (CCC) 98 CTMCRS Inquiry Service 60 Legal Compliance and Operations Department 99 BKM Member Merchant Turnover Information Inquiry Legal Compliance Unit 99 RC Warning Services Operations Center Unit 99 Individual Inquiry Unit Query 61 Internal Control Department 99 Force Majeure Inquiry Information Systems Control Unit Business Processes and Financial Control Unit 101 Findeks 62 Legal Consultancy Department 101 Findeks Audits Conducted, Sanctions and Penalties Imposed During the Period 102 Findeks Credit Rating Competitions Status of the Executives of the Company 102 Risk Report Remuneration of the Members of the Board of Dırectors and Senior Managers 102 Cheque Report Dividend Distribution Proposal 102 Cheque Index 64 Committees Department 103 Warning Service 103 Tracer ACTIVITIES 104 Rating Consultancy 68 Our Holistic Products and Services 104 Findeks QR Code Cheque System 70 KKB’s Products and Services 104 Letter of Guarantee Status Inquiry (LGSI) 71 Limit Control System (LCS) 71 Personal Credit Rating (PCR) 107 KKB Anadolu Data Center 72 False Information/Document/Declaration/Application Alert System (SABAS) 108 Technical Features of KKB Anadolu Data Center 72 Internet Frauds Alert System (IFAS) 108 Fast and Continuous Accessibility 73 Personal Indebtedness Index (PII) 75 Risk Report OUR SOCIAL CONTRIBUTION 76 Cheque Report 113 You Imagine, We Realize 77 GeoMIS – Map-Based Reporting Service 113 The Audio Question Bank 78 Agricultural Loan Assessment System (TARDES) 114 “If You Are There, We Are There, Too” 79 Cheque Index 114 KKB’s Running Team 79 Central Decision Support Systems (CDSS) 114 Steptember Donation Campaign 80 Commercial Credit Rating (CCR) 114 KKB Social Responsibility Club 80 Prescribed Accounts 80 Address Processing Service REPORTING 81 Cheque Status Inquiry 118 Declaration of Conformity for the Annual Report 81 Farmer Registry System (FRS) 120 Agenda of the Ordinary General Assembly

WHO ARE WE? KKB OFFERS THE SERVICES REQUIRED BY FINANCIAL SECTOR COMPANIES AS WELL AS THE REAL SECTOR TO CONDUCT APPROPRIATE RISK MANAGEMENT.

6 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 01. ABOUT KKB

Accounting Period of Report Kredi Kayıt Bürosu (KKB) was founded on mers. Upon transfer of the Risk Centrali- 01.01.2017 – 31.12.2017 April 11, 1995 as a partnership between zation Center within the organization of nine leading banks. As of year-end 2017, the Central Bank of Turkey, the Risk Center Trade Name KKB, a highly regarded financial insti- of the Banks Association of Turkey star- KKB Kredi Kayıt Bürosu A.Ş. tution, had 156 members: 44 banks, 61 ted up operations on 28 June 2013. KKB factoring, 23 leasing, four insurance, 14 conducted all operational and technical Trade Registration Number consumer finance, seven asset manage- activities through its own organization as 329148-276730 ment companies and three other types of an agency of the Risk Center of TBB and companies. As required by Banking Law providing data collection and sharing ser- MERSİS Number No: 5411 (Article 73/4), KKB was establis- vices to 177 financial institutions which 0564-0004-2270-0011 hed by at least five banks to facilitate the are members of the Risk Center. exchange of information and documents Address between financial institutions. Under the KKB offers its services not only to finan- Barbaros Mah. Ardıç Sok. Varyap same article, corporate members have cial institutions, but also to individuals Meridian F Blok ATAŞEHİR-ISTANBUL been sharing customers’ credit informa- and the real sector through “Cheque Re- tion since April 1999. port” and “Risk Report” systems launched Anadolu Kurumlar Tax in January 2013. In September 2014, KKB Office/Tax Number With Law No. 6111 issued on February 25, gathered its services aimed at individual 564 000 4227 2011, Additional Article 1 and Provisional customers and the real sector under the Article 28 were added to Banking Law umbrella of Findeks, the consumer servi- Phone Number No. 5411. Pursuant to Additional Article 1, ce platform of KKB. In addition to develo- +90 216 579 29 29 a Risk Center has been established within ping new products and services during the organization of the Banks Association the year, KKB continued to create added Fax Number of Turkey (TBB) to collect the risk data of value for the banking-finance industry pri- +90 216 455 45 36 customers of credit institutions and any marily, as well as the real sector, through financial institutions deemed appropriate partnerships across different industries. Website by the Banking Regulation and Supervisi- Ultimately, through the QR Code Cheque www.kkb.com.tr on Agency and to share such data with System – launched by KKB in 2015, beca- the referenced institutions and with the me mandatory by law in 2016, and entered Call Center customers themselves, or with any pri- into force as of January 1, 2017 – an impor- 444 99 64 – [email protected] vate legal entities and third real people tant step was taken for a more transpa- if consent has been given by the custo- rent and secure commercial transactions.

RELIABLE PARTNERSHIP IN FINANCIAL RISK MANAGEMENT

WHO ARE WE? 7 02. SHAREHOLDING STRUCTURE

AKBANK T.A.Ş. 9.09% YAPI VE KREDI BANKASI A.Ş. TÜRKIYE GARANTI 18.18% BANKASI A.Ş. 9.09%

TÜRKIYE İŞ BANKASI A.Ş. 9.09%

TÜRKIYE HALK T.C. ZIRAAT BANKASI A.Ş. BANKASI A.Ş. 18.18% 9.09%

DENIZBANK A.Ş. 9.09% T. VAKIFLAR ŞEKERBANK T.A.Ş. BANKASI T.A.O. 9.09% 9.09%

Kredi Kayıt Bürosu (KKB) was established on April 11, 1995 with the participation of nine leading banks.

8 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 03. VISION, MISSION AND STRATEGIES

Vision Mission

TO BECOME AN EXEMPLARY, LEADING CREDIT BU- TO OFFER THE INFORMATION AND TECHNOLOGY REAU IN THE WORLD AND A GROWING ASSET FOR THAT MEETS THE FINANCIAL NEEDS OF THE FI- TURKEY, BY EXCEEDING EXPECTATIONS WITH IN- NANCIAL INDUSTRY AND THE REAL SECTOR, IN NOVATIVE PRODUCTS AND SERVICES. THE BEST WAY, TO INCREASE THE OPERATIONAL EFFICIENCY OF THE INSTITUTIONS IT SERVES. Strategies ›› TO ENSURE THE ENRICHMENT OF THE EXISTING REDUCING THE REAL SECTOR’S COSTS OF AC- DATABASE BY BETTER MANAGING CUSTOMER CESSING INFORMATION TECHNOLOGIES, RISK WITH VALUE ADDED PRODUCTS AND SER- ›› TO PROVIDE COMPREHENSIVE REPORT AND VICES, WHICH WE PROVIDE TO THE RISK CENTER MACRO-ECONOMIC INDICATOR SERVICES ON (RC) OF THE BANKS ASSOCIATION OF TURKEY THE ECONOMIC/FINANCIAL OUTLOOK AND DIRE- (TBB) AT THE HIGHEST SECURITY STANDARDS CTION ON BEHALF OF THE MEMBER ORGANIZA- AND SERVICE LEVEL, TIONS OF THE KKB AND THE RISK CENTER, ›› TO DEVELOP ANALYTICAL MODELS BASED ON ›› TO PROVIDE OPERATIONAL EFFICIENCY AND DATA RICHNESS WITH THE “BIG DATA” CONCEPT COST ADVANTAGES BY CENTRALIZING TRANSA- AND TO MEET THE EFFECTIVE RISK MANAGE- CTIONS REALIZED BY DIFFERENT INSTITUTIONS, MENT NEEDS OF A DIVERSE RANGE OF INDUST- ›› TO EFFECTIVELY ANALYZE THE NEEDS THAT MAY RIES, ARISE IN DIFFERENT INDUSTRIES AND PROVIDE ›› TO INCREASE THE AWARENESS OF RECEIVABLE APPROPRIATE SOLUTIONS, RISK MANAGEMENT AND FINANCIAL LITERACY ›› TO BENEFIT THE SOCIETY AND THE ENVIRON- BY DEVELOPING PRODUCTS AND SERVICES FOR MENT WITH CORPORATE SOCIAL RESPONSIBI- THE REAL SECTOR AND INDIVIDUALS, LITY PROJECTS, AND RAISE SOCIETY’S AWARE- ›› TO CONTRIBUTE TO DOMESTIC R&D ACTIVITIES NESS ON THE SUBJECT MATTER, THAT SUPPORT SERVICE DIVERSITY OFFERED ›› TO BE AN INSTITUTION COMMITTED TO DELIVE- THROUGH CLOUD COMPUTING AND THE CLOUD, RING A HIGH LEVEL OF EMPLOYEE SATISFACTION, ›› TO COOPERATE WITH COMPANIES THAT PRODU- MAINTAINING A STRONG CORPORATE STRUCTU- CE TECHNOLOGY AND TO RAISE AWARENESS BY RE AND UPHOLDING THE PRINCIPLE OF EQUA- LITY.

WE ARE IMPROVING WE ARE BECOMING STRONG WE ARE STRONG WE ARE STRONGER WE ARE VERY STRONG NUMBER OF * MEMBERS 177

*KKB has 156 members, including members served through the Risk Center. WHO ARE WE? 9 04. MILESTONES

QR CODE CHEQUE 1995 2005

IMPLEMENTATION ›› KKB was established on April 11. ›› The Commercial Bureau System was BECAME COMPULSORY put into use for members in June.

AS OF JANUARY 1, 2017. 1999 2006 ›› The Credit Reference System (CRS) launched in April. ›› MIDES, Information Verification and the ›› With an amendment to the Banking Emergency Update System were con- Law on December 17, 1999, in addition verted into an online, interactive infor- to companies such as banks, insurance mation exchange platform. providers and consumer finance com- ›› The Limit Control System (LCS) launc- panies, other corporate enterprises hed pursuant to Article 9 of the Debit deemed appropriate by the Banking Cards and Credit Cards Law. Regulation and Supervision Agency (BRSA) are allowed to become mem- 2007 bers of KKB. ›› The Internet Frauds Alarm System (IFAS) launched in February 2000

›› The Customer Objections Handling Sys- 2008 tem (MIDES) launched in April and SA- BAS went into operation in September. ›› With the addition of the data from ›› In November, MIDES migrated to an ele- Mortgaged Real Estate, Persons Ban- ctronic platform, making it possible to ned from Participation in Tenders, and reply to a customer’s dispute within Bounced Cheques to the Corporate Bu- two hours maximum. reau System (CBS), the database was enriched. 2001 ›› The technical infrastructure of SABAS was improved and integrated with the ›› Credit Account Records as well as Cre- KKB system. dit Application Records launched in June. 2009

›› The Bounced Cheque Query System la- 2002 unched for inquiry of bounced cheque ›› The Information Verification System data, which are shared with the mem- (IVS) went into service. bers on a daily basis.

2004

›› Individual Credit Score (ICS) was introduced.

10 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 2012 2014 2016

›› Undergoing a period of rapid transfor- ›› The Findeks brand was introduced and ›› QR Code Cheque was enacted on Au- mation, KKB set out to create a system www.findeks.com launched. Findeks gust 9, 2016 with the announcement in for the real sector, similar to the clo- was introduced to the press. A 360-deg- Official Gazette numbered 29796. sed-circuit system between banks. ree communications campaign com- ›› The construction and infrastructure ›› In parallel with the modified vision and menced. of the Anadolu Data Center located in needs, the organizational structure was ›› The first corporate social responsibility Ankara was completed. revamped, and new corporate identity project, “You Imagine, We Realize,” orga- ›› Cheque Analysis Portal was launched. work was completed. nized by KKB for all university students ›› Limit Control System (LCS) Customer ›› Concrete steps were taken to launch in Turkey, started. The www.hayaledin- Objection Assessment System (COAS) the Risk Center. Risk and Cheque Re- gerceklestirelim.com website launched. application was put into service. ports were introduced and the E-Re- ›› GeoMIS, the map-based reporting sys- ›› KKB Unknown Number service was porting System, enabling electronic tem, was presented with the “Oracle launched. report requests and delivery, went into 2014 Innovator Excellence” award. ›› Collection Scores were introduced. service. ›› Cheque Status Inquiry launched. ›› Inclination Scores were rolled out. ›› The Household Database and Trade Re- ›› Commercial Credit Rating (CCR) Version 2013 gistry Sharing System (TRSS) launched. 2 was put into service. ›› The Loans Analysis Portal went live. ›› Total number of annual transactions ›› E-Reporting System launched. ›› The Address Processing System launc- exceeded 1 billion. ›› Commercial Credit Rating (CCR) launched. ›› The social responsibility project com- hed. ›› Letter of Guarantee Status Inquiry (LGSI) petition “You Imagine, We Realize” was ›› Credit Rating and Cheque Index star- launched. held for the third time. ted to be provided together with the Cheque and Risk Reports. 2015 2017 ›› E-Newsletter started to be sent to KKB members regularly. ›› The Findeks QR Code Cheque System la- ›› QR Code Cheque implementation beca- ›› GeoMIS, the map-based reporting ser- unched in collaboration with the Banks me compulsory as of January 1, 2017. vice, was made available to CRS-mem- Association of Turkey. ›› KKB’s Emergency Center moved to the ber institutions. ›› The National Fraud Detection and Pre- KKB Anadolu Data Center, which was ›› TARDES and GeoMIS websites went live. vention Service launched. completed in Ankara. ›› Data quality rose from 80% to 90% with ›› The Factoring Invoice Pool was created. ›› The Audio Question Bank was launc- the support of member institutions. ›› Ground was broken on the Data Center, hed by KKB employees to provide equal ›› Personal Credit Rating (PCR) was ope- which will be built in Ankara. opportunity for visually impaired stu- ned for use with an upgraded fourth ›› The Cross Cheque Inquiry Application dents. version. launched. ›› Force Majeure Inquiry and BKM Member ›› Following the agreement executed ›› IBAN Verification Service launched. Merchant Turnover Information Inquiry between the Banks Association of Tur- ›› The daily sharing system went into ser- services were launched. key (TBB) and KKB, work on the Risk vice. ›› Individual Inquiry Reports were put into Center commenced. All infrastructure ›› The Real Sector Credit Assessment Sys- service. and operation related works were un- tem, designed in collaboration with the ›› Loan Utilization Instant Sharing Service dertaken by KKB. Auto Leasing and Rental Companies As- (KAPS) was introduced. ›› The website www.kkb.com.tr was ref- sociation (TOKKDER) for the vehicle ren- reshed. tal and leasing sector, launched. ›› The second edition of the social responsibility project ideas competition, “You Imagine, We Realize,” was held. WHO ARE WE? 11 05. FINANCIAL AND OPERATIONAL INDICATORS

FIRST SERVING THE FINANCE-BANKING SECTOR, KKB MAINTAINED ITS SUCCESSFUL TRACK RECORD WITH THE VALUE-ADDED PRODUCTS AND SERVICES IT OFFERED IN 2017.

12 BANKS CONSUMER FINANCE 52 14

FACTORING FINANCIAL LEASING 61 25

INSURANCE OTHER 8 4

ASSET MANAGEMENT COMPANIES TOTAL MEMBERS 13 177*

Financial and Operational Indicators 2013 2014 2015 2016 2017 CRS Inquiries (million) 320 375 432 421 445 Corporate Bureau Inquiries (million) 6 12 24 18 30 Retail Credit Ratings 279 317 366 365 375 Inquiry Records/month (million) 32 46 52 45 46 Objections on MIDES 230 221 303 267 288 LCS Inquiries (million) 37 99 136 140 173 Produced Cheque Reports (million) 5 12 21 30 45 Produced Risk Reports (million) 2 6 11 13 15

*The number of KKB members is 156 and this figure defines the members who are served via the Risk Center. WHO ARE WE? 13 05. FINANCIAL AND OPERATIONAL INDICATORS

CONTINUING TO PROVIDE CRS INQUIRIES (MILLION UNITS) SERVICES WITH ITS ROBUST 475 SYSTEMS INFRASTRUCTURE, 445 432 421 KKB’S INDIVIDUAL BUREAU 375 375 INQUIRIES CLIMBED TO 320 445 MILLION IN 2017. 250

125

0 2013 2014 2015 2016 2017

CORPORATE BUREAU INQUIRIES (MILLION UNITS)

32 The monthly 30 24 inquiry record 24 18

amounted to 16 46 million in 12

8 2017. 6

0 2013 2014 2015 2016 2017

RETAIL CREDIT RATINGS (MILLION UNITS)

400 366 365 375

317 300 279

200

100

0 2013 2014 2015 2016 2017

14 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 IN 2017, LCS INQUIRIES LCS INQUIRIES (MILLION UNITS) TOTALED 173 MILLION WHILE 200 CHEQUE REPORTS PRODUCED 173 AMOUNTED TO 45 MILLION. 150 136 140

100 99

50 37

0 2013 2014 2015 2016 2017

PRODUCED CHEQUE REPORTS (MILLION UNITS)

45 45

30 30

15 12 5

0 2013 2014 2015 2016 2017

PRODUCED RISK REPORTS (MILLION UNITS)

16 15

13 12 11

4 2

0 2013 2014 2015 2016 2017

WHO ARE WE? 15

MANAGEMENT WE WILL CONTINUE DEVELOPING INNOVATIVE SOLUTIONS IN EACH FIELD FOR OUR STAKEHOLDERS.

MEHMET SEBAHATTİN BULUT CHAIRMAN OF THE BOARD

18 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 06. LETTER FROM THE CHAIRMAN

IN 2017, KREDİ KAYIT Dear Stakeholders, CONTINUING TO BENEFIT ALL STAKEHOL- BÜROSU (KKB) CONTINUED DERS Turkey left behind fast-expanding eco- In 2017, Kredi Kayıt Bürosu (KKB) continued TO CONTRIBUTE TO TURKEY’S nomies such as China and India by re- to contribute to the country’s economy by ECONOMY BY OFFERING cording economic growth of 11.1% in offering products and services that enab- third quarter 2017. After the slowdown le the banking and finance industry and PRODUCTS AND SERVICES experienced the previous year, Turkey’s the real sector to effectively manage their THAT ENABLE THE BANKING economy expanded 5.2% in the first qu- risks. arter and 5.1% in the second quarter led AND FINANCIAL INDUSTRY AS by domestic demand. Growth was also For the coming period, we will continue WELL AS THE REAL SECTOR supported by a strong labor market and providing new products and services and TO EFFECTIVELY MANAGE tax incentives, primarily Credit Guarantee delivering innovative solutions that will Fund (CGF), provided by the government. benefit all our stakeholders on all fronts. THEIR RISKS. In the third quarter, the effect of these dy- namics gathered even more momentum. Yours respectfully, We expect that the positive impact of the economic incentives will be reflected on the year-end growth rate for 2017. MEHMET SEBAHATTİN BULUT BANKING INDUSTRY WILL CONTINUE TO DRI- Chairman of the Board VE GROWTH IN 2018 The base effect, economic incentives, implementation of CGF, and healthy growth in the banking sector through effective risk management significantly contributed to Turkey’s growth in the third quarter. We expect the banking system to continue driving economic growth in 2018, with the ongoing support of the government to lending and Credit Guarantee Fund loans in 2018. We wish 2018 to be an even better year for all parties of the economy and our country.

EFFECTIVE RISK MANAGEMENT FOR ALL STAKEHOLDERS MANAGEMENT 19 WE CONTINUE TO CREATE ADDED VALUE IN DIGITALIZATION AND RISK MANAGEMENT

KASIM AKDENİZ BOARD MEMBER AND GENERAL MANAGER

20 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 07. LETTER FROM THE GENERAL MANAGER

Dear Stakeholders, enables access to numerous data related center will serve all sectors, primarily to cheque issuers, especially their past banking and finance. It features state- As of year-end 2017, the asset size of the payment performance. As a result, the of-the-art construction and advanced banking sector increased 19.3% compa- service allows for healthier decision-ma- security technologies. The facility also red to 2016. Loans, which are the largest king while providing credit via cheque. received LEED Platinum certification from asset item, went up 21% to TRY 2.1 trillion. the US Green Building Council, the highest Meanwhile, deposits, the biggest source The QR Code Cheque Report Service cont- level sustainable green building certifi- of funding for the banks, rose 17.7%. This ributed to the decrease in the ratio of cation granted by the USGBC. In addition, clearly reveals that the banking sector bounced cheques to 2.2% in 2017, down Anadolu Data Center obtained Tier IV cer- continues to use its resources in a way from 3.7% in 2016, in terms of units. We la- tification, the highest-level data center that stimulates economic growth. Com- unched a registration system that allows standard, after an assessment conduc- pared to year-end 2016, the non-perfor- the recording of cheques as of end-2017. ted by Uptime Institute. ming loans ratio declined 0.3 points to 2.9% in 2017. Effective risk management To increase awareness of the benefits OUR PRIORITY IS TO PROVIDE VALUE TO SO- in the industry clearly played a role in the provided to users of the QR Code Cheque CIETY decrease of the share of non-performing Report, we commissioned the “Safe Fu- In 2017, KKB successfully completed the loans. Despite global and regional uncer- ture in Trade with the Findeks QR Code fourth edition of the “You Imagine, We tainties, we expect the banking sector to Cheque” commercial video. In 2018, we Realize” competition. This initiative aims further contribute to Turkey’s economic will continue to raise awareness on the to generate ideas for innovative social growth in 2018 as well. At KKB, we will con- advantages of this offering and informa- responsibility projects while demonstra- tinue providing services for the industry tional efforts on how to read the QR Code ting the entrepreneurial, broad visionary to manage its risks effectively. Cheque Report. perspective of young people. Among the numerous applicant projects, all of which QR CODE CHEQUE ADVERTISING CAMPAIGN We made great progress in the Electronic are unique and valuable, we continue ef- FOR SECURE TRADE Letter of Guarantee, which we initiated forts to ensure the sustainability of two Kredi Kayıt Bürosu also continued to grow efforts for 2017. The first electronic gua- projects that KKB has launched. We rea- by taking strong, decisive steps forward rantee letter was issued in a test envi- lized the dreams of the students at Acı- in 2017. With the requirement to have QR ronment during the year. In 2018, we plan badem Medical School with the “If You Codes on cheques issued by banks as of to start offering the Electronic Guarantee Are There, We Are There, Too” project. This January 1, 2017, we had 265% growth in Letter Service. This service will facilitate initiative involves health screening for the number of Findeks-member commer- operations for the banks that issue the seasonal agricultural workers in Adana, cial companies for the year. During the letter, for beneficiaries and for payers the first phase of which was completed same period, we recorded 34% growth in while making the guarantee letter produ- in 2015. During the second phase of the the number of individual members. ct safer. project carried out in Adana in July 2017, a health team of 17 volunteers conducted Since the cheque is a credit instrument Another major development in 2017 was basic health screening for 250 seasonal that allows firms to provide loan to each the start of operations of Anadolu Data agricultural workers and their families for other in addition to serving a payment Center. The facility was built on a 43 thou- one week. This effort also included hand tool, KKB started to offer the QR Code sand m2 tract in Ankara and consists of cleaning and personal hygiene training Cheque Report Service. This offering three main sections. The national data for the workers’ children. KEY TASK FOR SAFE TRADE ENVIRONMENT

MANAGEMENT 21 07. LETTER FROM THE GENERAL MANAGER

RAPID DEVELOPMENT OF KKB VOLUNTEERS SHED LIGHT ON EDUCA- We plan to continue enabling particularly TECHNOLOGY AND ITS TION the banking and finance sectors to offer WIDESPREAD USE MAKE Another project backed by KKB is “Audio more products and services in the digital Question Bank,” which won first place in environment. KKB will also introduce ser- IT POSSIBLE FOR MANY the education category at the third editi- vices that minimize the risks and costs INDUSTRIES, ESPECIALLY on of the competition. This effort ensures associated with providing services on di- that the latest sources for YGS (Transition gital platforms. BANKING AND FINANCE, TO to Higher Education Exam) and LYS (Un- DELIVER THEIR PRODUCTS dergraduate Placement Exam) were vo- I would like to thank our shareholders and calized and sent to libraries serving the members for their trust and support in our AND SERVICES OVER THE visually impaired. Under this initiative, KKB Company; to our Board of Directors for the DIGITAL ENVIRONMENT. has made significant progress by voca- working meetings conducted effectively lizing a total of 7,468 questions to date, throughout the year, and for the power with a team consisting of 40 volunteers and support they have given us for the from among KKB staff. In the coming pe- decisions taken; and to all our staff who riod, we will take further steps to support continue to work hard across all our va- the projects of young people who develop rious functions and operations for their innovative ideas that will benefit society. efforts.

WE CONTINUE TO CREATE ADDED VALUE IN Yours respectfully, DIGITALIZATION AND RISK MANAGEMENT Rapid development of technology and its widespread use make it possible for many industries, especially banking and finance, to deliver their products and services over the digital environment. Digi- KASIM AKDENIZ talization allows users to reach products Board Member and General Manager and services seamlessly and much more easily, while companies can offer products and services at lower cost.

With “Audio Question Bank,” KKB provided that the latest sources for YGS (Transition to Higher Education Exam) and LYS (Undergraduate Placement Exam) were vocalized and sent to libraries serving the visually impaired.

22 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 NUMBER OF PERSONAL CREDIT RATING 375 MILLION

NUMBER OF PRODUCED RISK REPORTS 15 MILLION

MANAGEMENT 23 08. BOARD OF DIRECTORS

MEHMET SEBAHATTIN BULUT ting at Şekerbank and Board Member at EGE GÜLTEKIN Chairman of the Board of Directors Şeker Factoring since April 2014. He has Member of the Board of Directors Türkiye Halk Bankası A.Ş. been a member of the Board of Direc- Akbank T.A.Ş. Deputy General Manager, Loan Policies tors at KKB since March 2015. Mr. Ertürk Executive Vice President, Credit Monito- and Risk Monitoring has been Vice Chairman of the Board of ring and Follow Up Mehmet Sebahattin Bulut was born in Directors since 2017. Ege Gültekin was born in Aydın in 1969 Erzurum in 1965 and graduated from and graduated from Middle East Tech- Uludağ University, Faculty of Economics DEMIR KARAASLAN nical University, Department of Eco- and Administrative Sciences, Depart- Member of the Board of Directors and nomics. Subsequently, she earned a ment of Econometrics. After working in Audit Committee Member Master’s degree from The Johns Hop- the private sector for a time, he joined Yapı ve Kredi Bankası A.Ş. kins Carey Business School. After gra- Türkiye Vakıflar Bankası T.A.O. as an As- Retail Loans, Deputy General Manager duating from Ziraat Bank’s Banking sistant Financial Analysis Specialist in Demir Karaaslan graduated from Mar- School in 1992, she began her career at 1994. He later served, respectively, as mara University, Department of Busi- Osmanlı Bank on the Audit Committee. Inspector, Supervisor Manager, Com- ness Administration in 1999. He began Mrs. Gültekin is currently Executive Vice mercial/Project Loans Manager, Branch his professional career as an Assistant President in charge of Credit Monitoring Manager and Department Head at the at PricewaterhouseCoopers, working at and Follow Up at Akbank T.A.Ş. She has same bank. Serving as a member of the company between September 1999 been a member of the Board of Direc- the Board of Directors and Audit Com- and December 2004, lastly as Audit tors at KKB since May 2015. mittee in various subsidiaries of Türki- Manager. After starting work at Koç- ye Vakıflar Bankası T.A.O., Mr. Bulut was bank A.Ş. in January 2005, he held the İZZET OĞUZHAN ÖZARK appointed the Deputy General Manager positions of Budget Planning Director Member of the Board of Directors responsible for the Loan Policies and and Head of the Planning and Control Denizbank A.Ş. Risk Monitoring at Türkiye Halk Banka- Department, respectively. Following the Deputy General Manager, Retail Banking sı A.Ş. as of July 10, 2014. Mr. Bulut has merger of Koçbank and Yapı ve Kredi Sales Group been a member of KKB Board of Direc- Bankası in 2006, he served as Planning İzzet Oğuzhan Özark was born in İstan- tors since 2014. and Control Director until May 2011 and bul in 1976 and graduated from İstan- then as Planning and Control Group Di- bul Technical University, Department of GÖKHAN ERTÜRK rector. He was appointed Deputy Gene- Mathematics Engineering. He started Vice Chairman of the Board of Directors ral Manager in charge of Retail Loans as his professional career in the Retail and Member of the Audit Committee of January 2016. During his career, Mr. Banking Department at Garanti Bankası Şekerbank T.A.Ş. Karaaslan served as Statutory Auditor in 1997. He worked as Supervisor in the Deputy General Manager, Retail Banking and Board Member at various subsidi- SME Banking Department of the same Gökhan Ertürk was born in 1970 and gra- aries of Yapı Kredi Bankası. Since March bank from 1999 to 2002 and in the CRM duated from Boğaziçi University with a 2016, Mr. Karaaslan has been the Mem- Department between 2003 and 2004. double major in Political Science, Inter- ber of the KKB Board of Directors. Starting work at DenizBank as Manager national Relations and Business Admi- of the SME Banking Sales Department nistration and Electronic Programming. in 2004, Mr. Özark served as Group Ma- He began his banking career at İktisat nager of Retail Banking Sales Manage- Bank in 1996. In 1997, he set up the Cash ment from 2009 until 2013 and was ap- Management Department at Türk Eko- pointed Deputy General Manager of the nomi Bank and served as Director of Retail Banking Sales Group in February the department. From 2002 to 2006, Mr. 2014. Mr. Özark has served as a mem- Ertürk worked as Head of SME Banking ber of the Board of Directors at KKB sin- at Akbank. Subsequently, he served as ce April 28, 2014. Vice President of SME and Agricultural Banking (2006), and Vice President of Retail Banking (2009) at DenizBank and Board Member at Deniz Pension and Life. Mr. Ertürk has served as Senior Vice President of Retail Banking Marke- 08. BOARD OF DIRECTORS

BACK ROW (LEFT TO RIGHT): İzzet Oğuzhan Özark, Mehmet Emin Karaağaç, Murat Bilgiç, Mehmet Sebahattin Bu- lut, Gökhan Ertürk, Şükrü Alper Eker, Demir Karaaslan

FRONT ROW (LEFT TO RIGHT): Veysel Sunman, Ege Gültekin, Kasım Akdeniz 26 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 ŞÜKRÜ ALPER EKER VEYSEL SUNMAN KASIM AKDENIZ Board Member Member of the Board of Directors and the Member of the Board of Directors and Ge- T. Garanti Bankası A.Ş. Audit Committee neral Manager Coordinator, Individual and SME Loans T.C. Ziraat Bankası A.Ş. Having about 31 years of experience in Risk Management Head, Credit Risk Monitoring Department the banking industry, Kasım Akdeniz star- Şükrü Alper Eker was born in Eskişehir in Veysel Sunman was born in Sakarya in ted his professional career at Yapı Kredi 1973 and graduated from Boğaziçi Univer- 1967 and graduated from Marmara Uni- on the Inspection Board in 1987. Between sity, Department of Chemical Engineering versity, Higher School of Press and Me- 1996 and 2011, he held managerial respon- in 1996. He received his Master’s degree dia, Department of Journalism and Pub- sibilities, working as manager, director, from Texas A&M University – College Sta- lic Relations. He worked as Specialist in and group president primarily for the ge- tion in 1998, and his PhD from the Uni- the Credit Risk Monitoring Department at neration of loan products and processes, versity of Houston in 2001. He started his Pamukbank T.A.Ş. from 1988 to 1994. Mr. establishment and management of the professional career in 2001 at GE Global Sunman went on to work as Manager of loan allocation and monitoring systems, Research Center in the United States as the Credit Monitoring Department at Os- formulation of loan policies as well as the System Control and Optimization Pro- manlı Bankası A.Ş. between 1994 and compliance. During this period, he served ject Leader. After working on R&D proje- 2001. Subsequently, he served as Head of as a member of working groups within the cts for GE Energy, Medical Systems and the Credit Risk Monitoring Department at Banks Association of Turkey in regards to other GE companies, he moved over to T. Halk Bankası A.Ş. from 2002 until 2005 the preparation of the Banking Law and Risk Management at GE Capital in 2005. and as Head of the Internal Control and its sub-regulations, and within KKB in re- Between 2005 and 2011, he served in va- Monitoring Center at MNG Bank from 2005 gards to the establishment of the Corpo- rious positions and levels at GE Capital to 2007. Mr. Sunman has served as Head rate Bureau, Intermediary Costs on Loans, in the US, Europe and Turkey. He went on of the Credit Risk Monitoring Department and Loans and Provisions. He also served to work as Risk Director at Garanti Ban- at T.C. Ziraat Bankası A.Ş. since 2007. as the Chairman of the Credit Guarantee kası-BBVA Representative Office between Fund (CGF) Working Group and the Risk 2011 and 2015. Since September 2015, he MEHMET EMIN KARAAĞAÇ Center Working Group. In 2007, he was the has served as the Coordinator of Garan- Member of the Board of Directors Chairman of the Board of Directors of KKB ti Bankası Individual and SME Loans Risk Türkiye Vakıflar Bankası T.A.O. Kredi Kayıt Bürosu A.Ş., and a Board Mem- Management Department. Since March Executive Vice President, Legal Affairs & ber between 2005 and 2011. Kasım Akde- 2016, he has been a member of KKB Board Credit Risk-Receivables niz was appointed General Manager of of Directors. Mehmet Emin Karaağaç was born in Kon- KKB Kredi Kayıt Bürosu A.Ş. as of October ya in 1963 and graduated from Istanbul 2011; he continues to hold this position. MURAT BILGIÇ University, Faculty of Law. He began his Member of the Board of Directors professional career in 1989 as an Attorney T. İş Bankası A.Ş. at Türkiye İş Bankası A.Ş. Until January 2, Deputy General Manager, Loans 2012, he served as Associate Counsel and Murat Bilgiç was born in 1968 in Ankara. Legal Counsel in various units of Türkiye He holds a Bachelor’s degree from Middle İş Bankası A.Ş. As of January 3, 2012, he East Technical University, Faculty of Eco- started work as the Chief Legal Consultant nomics and Administrative Sciences and at the Türkiye Vakıflar Bankası T.A.O. Legal a Master’s degree in Money, Banking and Consultancy. Mr. Karaağaç was appointed Finance from University of Birmingham. Executive Vice President responsible for Mr. Bilgiç also attended the Advanced Ma- Legal, Loan Monitoring and Supervision nagement Program at Harvard Business Affairs at Türkiye Vakıflar Bankası T.A.O. on School. He joined İşbank in 1990 as As- October 25, 2013. He has served as De- sistant Inspector in the Inspection Board puty General Manager responsible for the Department and later served in other va- Legal Consultancy, Legal Affairs and Cre- rious units at İşbank. Mr. Bilgiç was appo- dit Risk Liquidation since July 2017. inted Deputy General Manager on March 25, 2016.

MANAGEMENT 27 09. SENIOR MANAGEMENT

KASIM AKDENIZ ABDULLAH BILGIN KORAY KAYA

İNCI TÜMAY ÖZMEN ORKUN DENİZ ALI KEMAL CENK

SERDAR ÇOLAK HAKAN GÜMÜŞ GÜRKAN PLATİN

ERŞAN RASİM HOŞRIK HAZAR TUNA BAHATTIN ÇELIK

28 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 KASIM AKDENIZ rosu, which he joined in 1997; he played an active role during the GÜRKAN PLATIN Member of the Board of Directors and General Manager launch of Turkey’s first credit bureau system. Mr. Deniz designed Communication Center Department Having about 31 years of experience in the banking industry, Kasım the Corporate Bureau System – which was established by the KKB, Manager Akdeniz started his professional career at Yapı Kredi on the Ins- entirely with its own resources – and managed the development Gürkan Platin was born in Ankara in 1972 and graduated from Ha- pection Board in 1987. Between 1996 and 2011, he held managerial process. He continued his career at Fortis Bank, serving as Direc- cettepe University, Department of Public Administration, where he responsibilities, working as manager, director, and group president tor in charge of System Development, Reporting, Loan Policies and completed his undergraduate studies in Marketing, Management primarily for the generation of the loan products and processes, es- Rating in the Corporate Loans Department. He held several roles and Organization. He started his professional career at Mensan tablishment and management of the loan allocation and monitoring during the transformation process of KKB, which he rejoined at the Group of Companies in the food sector in Ankara, where he worked systems, formulation of loan policies as well as compliance. During beginning of 2011. Primarily, Mr. Deniz ensured the expansion of the between 1994 and 1996. In 1996, he joined Citibank Turkey in the this period, he served as a member of working groups within TBB in product portfolio of KKB by developing new products and services area of Payment Systems Products; he worked, respectively, as regards to the preparation of the Banking Law and its sub-regulati- as the Manager of Project and Process Management. Later, he di- Sales Representative, Sales Team Leader and Sales Force Training ons, and within KKB in regards to the establishment of the Corpora- rected all financial sector affairs as the Manager of the Banks and Manager, in the same group. During this time, Mr. Platin worked on te Bureau, Intermediary Costs on Loans, and Loans and Provisions. Financial Institutions Unit. Throughout his career of over 15 years at web based solutions regarding reporting and monitoring systems, He also served as the Chairman of the Credit Guarantee Fund (CGF) KKB, Mr. Deniz has provided consulting support for the attempts of in addition to providing training and management of the human re- Working Group and the Risk Center Working Group. In 2007, he was many countries to establish credit bureaus. Since September 2016, sources of direct sales organizations. After establishing Demirbank the Chairman of the Board of Directors of KKB Kredi Kayıt Bürosu Mr. Deniz has served as the Deputy General Manager responsible Ankara Direct Sales Organization as the Regional Sales Manager in A.Ş., and a Board Member between 2005 and 2011. Kasım Akdeniz for Risk Center Coordination. 2000, he started work as Direct Sales Director for Garanti Payment was appointed General Manager of KKB Kredi Kayıt Bürosu A.Ş. as of Systems at the end of the same year. He became responsible for October 2011; he continues to hold this position. ALI KEMAL CENK card sales starting in 2001 with a sales force directly under his Internal Audit management and only through the Direct Sales Team. Mr. Platin’s ABDULLAH BILGIN Deputy General Manager responsibility later expanded to include all sales channels, with Information Technologies Ali Kemal Cenk has 17 years of professional experience. He gradua- the establishment of Telesales teams, development of card sales Deputy General Manager ted from Middle East Technical University, Department of Business processes for the branches of Garanti Bank, management of card Abdullah Bilgin has 32 years of professional experience. He gradua- Administration. Between 2000 and 2012, Mr. Cenk held various posi- sales projects of member merchants, and the execution of portfo- ted from Middle East Technical University, Department of Computer tions at the Banking Regulation and Supervision Agency, including lio sales activities. Ultimately, while serving as the Group Manager Engineering in 1985. Mr. Bilgin received his Master’s degree from Sworn-in Bank Auditor, Group Head, 2011 FSAP Coordinator, and Vice responsible for all card sales channels of both individual cards and İstanbul University, Department of International Relations in 2002. President of the Audit Department. He took key roles in the Working commercial cards at Garanti Payment Systems, he resigned from Starting his career at Bilpa A.Ş. in 1986, Mr. Bilgin later worked as Group for the Risk-Focused Supervision Project, through which the Garanti Bankası in January 2008. Subsequently, Mr. Platin became System Manager at John Deere in the USA. Subsequently, he ser- BRSA has reestablished its audit system. He also took part in a one- the General Manager of Telegami Sales Services, which he founded, ved as Director in charge of System and Network Management in month program geared towards the Risk-Focused Supervision Pro- and a member of the Board of Directors of 121m Group of Compa- the Information Technologies Department at Yapı Kredi Bankası and ject involving Federal Reserve audits, and carried out FDIC-related nies. Having joined KKB in 2014, Mr. Platin is the Communication as Group Manager of Self-Service Banking in the Alternative Dist- studies. Mr. Cenk earned a dual MBA/MSF degree from Boston Colle- Center Department Manager. ribution Channels Department until 2012. Mr. Bilgin has served as ge between 2007 and 2009. In addition to BRSA audits concerning Deputy General Manager in charge of Information Technologies at a range of legal issues, internal systems, and information mana- ERŞAN RASİM HOŞRIK KKB since November 2012. gement, he also conducted various audits in the Netherlands and Legal Compliance and Operations Department Germany. Mr. Cenk attended a series of training courses on Risk Manager KORAY KAYA Management in the USA, Basel II-III, internal control and banking; he Erşan Rasim Hoşrik started his professional career in 2006 as As- Marketing and Business Development also participated in training courses and has certificates of comp- sistant Inspector at Yapı Kredi Bankası; he went on to hold various Deputy General Manager letion on COBIT, TFRS, International Accounting Standards, Oliver positions in the Branch Audit, Headquarters Audit and Investigation Koray Kaya has 22 years of experience in the banking industry. He Wyman Risk Management, and European Central Bank Eurosystem units at YKB. After resigning from his post with the Inspection Bo- graduated from Yıldız Technical University, Faculty of Engineering, Macro-Micro Financial Audit. Mr. Cenk has been serving as Deputy ard in 2012, he worked in the Compliance Office as Financial Crimes Department of Civil Engineering. After completing his MBA studies General Manager of Internal Audit since April 2012. Prevention Manager and Banking Legislation Manager, respectively. in the United States between 1991 and 1994, Mr. Kaya started his During his tenure in the Compliance Office, he was involved in coor- career at Garanti Bankası in 1995. He played a key role in the es- SERDAR ÇOLAK dinating the supervision of the Banking Regulation and Supervision tablishment of one of the first personal loans scoring systems in Risk Management Agency and the Ministry of Customs and Trade. In addition, Mr. Hoş- Turkey. During his tenure at Garanti Bankası, Mr. Kaya designed Director rik served the representative in the working groups of the Banking credit automation systems for consumer loans, credit cards and Serdar Çolak has 12 years of professional experience. He graduated Association in Turkey. He also participated in studies to prepare small enterprise loan applications. In 2004, he started work as a from Robert College and from İstanbul Technical University and Sta- regulations related to the banking in the Consumer Protection Law. Consultant at Experian. Mr. Kaya went on to serve as a Consultant te University of New York, Department of Economics, respectively, Having joined KKB in June 2016, Erşan Hoşrik works as Manager of on projects pertaining to automation of credit cards at almost all as the highest ranking student. He received his Master’s degree the Legal Compliance and Operations Department. banks in Turkey. He created the good/bad definition at the customer from Boğaziçi University, Department of Management Information level used in the scorecard infrastructure of KKB. Subsequently, Mr. Systems. Mr. Çolak started his professional career as SAP Consul- HAZAR TUNA Kaya served as Director of the Personal Loans Allocation Depart- tant in New York City (USA) in 2006. After gaining experience there, Internal Control ment at TEB from 2005 until 2009. During that period, he pioneered he went on to work in the İstanbul office of PwC Turkey, where he Manager the modernization of the personal loans approval platform of TEB in served as Manager of the Risk, Process and Technology Services Hazar Tuna has 12 years of professional experience. After comp- accordance with the environment at that time. After starting work Department. Having broad experience in the finance industry, Mr. leting his studies at Üsküdar American High School, he graduated as Head of the Personal Loans Monitoring and Collection Depart- Çolak’s areas of expertise include corporate risk management, from Purdue University, Department of Computer Engineering in ment at Akbank in 2009, Mr. Kaya joined the Board of Directors at information systems governance, information security, business 2005. He completed his Executive MBA at Boğaziçi University in Kredi Kayıt Bürosu. He was appointed Head of the Personal Loans continuity, SOX IT, organizational and process structuring of com- 2012. Mr. Tuna started his career in the Corporate Risk Services De- Allocation Department at the same organization in January 2012. panies in the finance sector, and Banking Regulation and Supervi- partment at Deloitte Denetim in 2006. He took part in independent Mr. Kaya has worked as Deputy General Manager in charge of Mar- sion Agency information systems audits. At PwC Turkey, Mr. Çolak information systems audits at banks and information systems risk keting and Business Development at KKB since May 2012. also served as Manager in charge of teams engaged in projects security and Sarbanes-Oxley audit related work in the real sector. involving audit and consultancy services at various financial ins- Mr. Tuna continued his career in the Information Technologies Audit İNCI TÜMAY ÖZMEN titutions such as banks, insurance providers, leasing companies, Department at Yapı Kredi Bankası from 2008 to 2013. In addition, Financial Reporting and Financial Affairs factoring companies and capital market intermediary firms. He su- he conducted pilot installation work of the audit workflow software Deputy General Manager bmitted reports to the BRSA as independent auditor in charge of program, which was designed for use in the entire UniCredit Group, İnci Tümay Kesici has 21 years of professional experience. She BRSA information systems audits conducted at many banks and playing a key role in shaping the final version thereof. Mr. Tuna has graduated from Boğaziçi University, Department of Business Admi- their invested companies in Turkey, Germany, Greece and Portugal. served as Internal Control Manager at Kredi Kayıt Bürosu since April nistration with a degree in 1995. She started her career at Ernst & Having the titles of Information Systems Auditor (CISA), ISO 27001 2013. Having served as the Information Systems Auditor (CISA), ISO Young Denetim in 1995. Having obtained the title of Certified Public Information Security Management System and ISO 22301 Business 27001 Information Security Management System and ISO 22301 Bu- Accountant in 2000, he left the company as Manager. Ms. Kesici Continuity Management System Chief Auditor, Mr. Çolak has ser- siness Continuity Management System Chief Auditor, Mr. Tuna has worked as Deputy General Manager in charge of Financial Affairs, ved as Risk Management Manager at Kredi Kayıt Bürosu since April been the Internal Control Manager at KKB since April 2013. Administrative Affairs, Budget Reporting and Operations at Yapı Kre- 2014. He is the Senior Management Representative in charge of the di Leasing from 2000 to 2012. Leasing played an active role in the Information Security, Corporate Risk Management and Process Ma- BAHATTIN ÇELIK adaptation process of the BRSA and Koçbank-YKB merger. İnci Tü- nagement teams. Legal Consultancy Department may Özmen joined KKB in May 2012, and she has served as Deputy Legal Counsel General Manager of Financial Reporting and Financial Affairs since HAKAN GÜMÜŞ Bahattin Çelik graduated from Dokuz Eylül University, Faculty of Law October 2014. İnci Tümay Özmen was authorized as Independent Human Resources Department in 1985. Following his law internship and judge candidacy, he ser- Auditor in 2017 by the Public Oversight, Accounting and Auditing Manager ved as a lawyer, associate counsel and legal counsel at Yapı Kredi Standards Authority. Having about 25 years of business experience, Hakan Gümüş gra- Bank between 1989 and 2006. Between 2006 and 2015, Mr. Çelik duated from Hacettepe University, Department of Economics in worked as Legal Counsel/Group Manager and Consultant at ING ORKUN DENIZ 1989. Mr. Gümüş started his professional career in 1991 as Assistant Bank. He has been the Legal Counsel at KKB since January 19, 2015. Risk Center Coordination Inspector at Akbank T.A.Ş., where he later served as Inspector, De- Mr. Çelik is a Lawyer-Mediator registered with the Union of Turkish Deputy General Manager puty Human Resources Manager, Eskişehir and Istanbul Regional Bar Association as 19357 and with the Mediator Registry as 1524. Orkun Deniz graduated from Boğaziçi University, Department of Manager, SME Banking Sales Manager, Head of the Marketing De- Computer Engineering in 1995. He continued his academic stu- partment and Human Resources Career Manager. After leaving Ak- dies at Yeditepe University, first receiving his MBA and later his bank in October 2012, he worked as Human Resources Manager for doctorate degree in Management and Organization. He started his four years at Türkiye Finans Katılım Bankası. Hakan Gümüş joined professional career at Akbank as a Software Developer in the IT KKB as Human Resources Manager in October 2016, and continues Department. He was among the founding team of Kredi Kayıt Bü- to serve in this position. MANAGEMENT 29 10. MEMBERS

OFFERING PRODUCTS AND Products 2012 2013 2014 2015 2016 2017 SERVICES THAT MEET THE Banking 38 39 42 53 52 52 Factoring 72 77 76 69 62 61 NEEDS OF THE BANKING AND Financial Leasing 16 16 20 29 26 25 FINANCE INDUSTRY, KKB Consumer Finance 9 13 12 12 14 14 CURRENTLY SERVES ABOUT Asset Management - - - 12 15 13 Company 180 MEMBERS. Insurance and Other 1 4 4 10 11 12 Total 136 149 154 185 180 177* *KKB has 156 members, defining members as those served via the Risk Center.

MEMBER BANKS

ADABANK A.Ş. KUVEYT TÜRK KATILIM BANKASI A.Ş. AKBANK T.A.Ş. MERRILL LYNCH YATIRIM BANK A.Ş. AKTİF YATIRIM BANKASI A.Ş. NUROL YATIRIM BANKASI A.Ş. ALBARAKA TÜRK KATILIM BANKASI A.Ş. ODEABANK A.Ş. ALTERNATİFBANK A.Ş. PASHA YATIRIM BANKASI A.Ş. ANADOLUBANK A.Ş. QNB FİNANSBANK A.Ş. ARAP TÜRK BANKASI A.Ş. RABOBANK A.Ş. BANK MELLAT SOCIETE GENERALE S.A. BANK OF TOKYO MITSUBISHI UFJ TURKEY A.Ş. STANDARD CHARTERED YATIRIM BANKASI TÜRK BANKPOZİTİF KREDİ VE KALKINMA BANKASI A.Ş. A.Ş. HEAD OFFICE BİRLEŞİK FON BANKASI A.Ş. ŞEKERBANK T.A.Ş. BURGAN BANK A.Ş. T.C. ZİRAAT BANKASI A.Ş. CITIBANK A.Ş. THE ROYAL BANK OF SCOTLAND PLC. DENİZBANK A.Ş. TURKISH BANK A.Ş. DEUTSCHE BANK A.Ş. TURKLAND BANK A.Ş. DİLER YATIRIM BANK A.Ş. TÜRK EKONOMİ BANKASI A.Ş. FİBABANKA A.Ş. TÜRK EXIMBANK T. İHRACAT KREDİ BANKASI A.Ş. GSD YATIRIM BANKASI A.Ş. TÜRKİYE FİNANS KATILIM BANKASI A.Ş. HABIB BANK LİMİTED TÜRKİYE HALK BANKASI A.Ş. HSBC BANK A.Ş. TÜRKİYE GARANTİ BANKASI A.Ş. ICBC Turkey Bank A.Ş. TÜRKİYE İŞ BANKASI A.Ş. ING BANK A.Ş. TÜRKİYE KALKINMA BANKASI A.Ş. INTESA SANPAOLO S.P.A. İTALYA İSTANBUL TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. MERKEZ ŞUBESİ TÜRKİYE VAKIFLAR BANKASI T.A.O. İLLER BANKASI VAKIF KATILIM BANKASI A.Ş. İSTANBUL TAKAS VE SAKLAMA BANKASI A.Ş. YAPI VE KREDİ BANKASI A.Ş. JP MORGAN CHASE BANK ZİRAAT KATILIM BANKASI A.Ş.

CONSUMER FINANCE COMPANIES

ALJ FİNANSMAN A.Ş. ORFİN FİNANSMAN A.Ş. DD FİNANSMAN A.Ş. ŞEKER MORTGAGE FİNANSMAN A.Ş. EVKUR FİNANSMAN TEB FİNANSMAN A.Ş. HEMENAL FİNANSMAN A.Ş. TIRSAN FİNANSMAN A.Ş. KOÇ FIAT KREDİ FİNANSMAN A.Ş. TURKCELL FİNANSMAN A.Ş. KOÇ FİNANSMAN A.Ş. VFS FİNANSMAN A.Ş. MERCEDES BENZ FİNANSMAN TÜRK A.Ş. VOLKSWAGEN DOĞUŞ FİNANSMAN A.Ş.

30 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 FACTORING COMPANIES OTHER

ABC FAKTORİNG A.Ş. BORSA İSTANBUL A.Ş. ACAR FAKTORİNG A.Ş. PRİME FAKTORİNG HİZMETLERİ A.Ş. KREDİ GARANTİ FONU A.Ş. AK FAKTORİNG A.Ş. SARDES FAKTORING A.Ş. JCR Avrasya Derecelendirme A.Ş. AKDENİZ FAKTORİNG A.Ş. STRATEJİ FAKTORİNG A.Ş. TÜRKİYE TARIM KREDİ KOOPERATİFLERİ AKIN FAKTORİNG A.Ş. SÜMER FAKTORING A.Ş. MERKEZ BİRLİĞİ ANADOLU FAKTORİNG HİZMETLERİ A.Ş. ŞEKER FAKTORİNG A.Ş. ANALİZ FAKTORİNG A.Ş. ŞİRİNOĞLU FAKTORİNG FİNANSAL HİZMETLERİ ARENA FAKTORING A.Ş. TİCARET A.Ş. FINANCIAL LEASING COMPANIES ATAK FAKTORİNG HİZMETLERİ A.Ş. TAM FAKTORİNG A.Ş. ATILIM FAKTORING A.Ş. TEB FAKTORİNG A.S. A&T FİNANSAL KİRALAMA A.Ş. BAŞER FAKTORING A.Ş. TUNA FAKTORİNG HİZMETLERİ A.Ş. AK FİNANSAL KİRALAMA A.Ş. BAYRAMOĞLU FAKTORİNG A.Ş. ULUSAL FAKTORING A.Ş. ALTERNATİF FİNANSAL KİRALAMA A.Ş. BERG FAKTORİNG HİZMETLERİ A.Ş. VAKIF FAKTORİNG A.Ş. ANADOLU FİNANSAL KİRALAMA A.Ş. C FAKTORING A.Ş. VDF FAKTORING HİZMETLERİ A.Ş. ARI FİNANSAL KİRALAMA A.Ş. CREDİTWEST FAKTORİNG HİZMETLERİ A.Ş. YAPI KREDİ FAKTORİNG A.Ş. BNP PARIBAS FİNANSAL KİRALAMA A.Ş BURGAN FİNANSAL KİRALAMA A.Ş. ÇAĞDAŞ FAKTORİNG A.Ş. YAŞAR FAKTORİNG A.Ş. DELAGE LANDEN FİNANSAL KİRALAMA A.Ş. ÇÖZÜM FAKTORİNG A.Ş. YEDITEPE FAKTORING HİZMETLERİ A.Ş. DENİZ FİNANSAL KİRALAMA A.Ş. DE LAGE LANDEN FAKTORİNG A.Ş. ZORLU FAKTORİNG A.Ş. ENKA FİNANSAL KİRALAMA A.S. DENİZ FAKTORİNG A.Ş. FİNANS FİNANSAL KİRALAMA A.Ş. DESTEK FAKTORİNG A.Ş. INSURANCE COMPANIES GARANTİ FİNANSAL KİRALAMA A.S. DEVİR FAKTORİNG HİZMETLERİ A.Ş. HALİÇ FİNANSAL KİRALAMA A.Ş. DOĞA FAKTORİNG A.Ş. AKSİGORTA A.Ş. HALK FİNANSAL KİRALAMA A.Ş. DOĞAN FAKTORİNG A.Ş. ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ ING FİNANSAL KİRALAMA A.Ş. ATRADIUS CREDITO Y CAUCION S.A. DE EKO FAKTORİNG A.Ş. İŞ FİNANSAL KİRALAMA A.Ş. EKSPO FAKTORİNG A.Ş. SEGUROS Y REASEGUROS MERKEZİ İSPANYA MERCEDES BENZ FİNANSAL KİRALAMA TÜRK A.Ş. EREN FAKTORİNG A.Ş. TÜRKİYE İSTANBUL ŞUBESİ PERVİN FİNANSAL KİRALAMA A.Ş. FİBA FAKTORİNG A.Ş. COFACE SİGORTA A.Ş. SİEMENS FİNANSAL KİRALAMA A.Ş. FİNANS FAKTORİNG A.Ş. UNICO SİGORTA A.Ş. ŞEKER FİNANSAL KİRALAMA A.Ş GARANTİ FAKTORING A.Ş. EULER HERMES SİGORTA A.Ş. VAKIF FİNANSAL KİRALAMA A.Ş. GLOBAL FAKTORİNG HİZMETLERİ A.Ş. EUREKO SİGORTA VFS FİNANSAL KİRALAMA A.Ş. GSD FAKTORİNG A.Ş. ZİRAAT SİGORTA A.Ş. YAPI KREDİ FİNANSAL KİRALAMA A.O. HALK FAKTORİNG A.Ş. YATIRIM FİNANSAL KİRALAMA A.Ş. HUZUR FAKTORING A.Ş. ASSET MANAGEMENT COMPANIES ZİRAAT FİNANSAL KİRALAMA A.Ş. ING FAKTORİNG A.Ş. İSTANBUL FAKTORİNG A.Ş. BİRLEŞİM VARLIK YÖNETİM A.Ş. İŞ FAKTORİNG A.Ş. DESTEK VARLIK YÖNETİM A.Ş. KAPİTAL FAKTORING A.Ş. EFES VARLIK YÖNETİM A.Ş. KENT FAKTORING A.Ş. EMİR VARLIK YÖNETİM A.Ş. KREDİ FİNANS FAKTORİNG HİZMETLERİ A.Ş. FİNAL VARLIK YÖNETİM A.Ş. LİDER FAKTORİNG HİZMETLERİ A.Ş. GÜVEN VARLIK YÖNETİM A.Ş. MERKEZ FAKTORİNG HİZMETLERİ A.Ş. HAYAT VARLIK YÖNETİM A.Ş. MERT FİNANS FAKTORING HİZM. A.Ş. HEDEF VARLIK YÖNETİM A.Ş. MNG FAKTORING HİZMETLERİ A.Ş. İSTANBUL VARLIK YÖNETİM A.Ş. OPTİMA FAKTORİNG A.Ş. MEGA VARLIK YÖNETİM A.Ş. PAMUK FAKTORİNG A.Ş. SÜMER VARLIK YÖNETİMİ A.Ş. PARA FINANS FAKTORING A.Ş. VERA VARLIK YÖNETİMİ A.Ş. YUNUS VARLIK YÖNETİMİ A.Ş.

MANAGEMENT 31 11. ORGANIZATIONAL CHART

BOARD OF DIRECTORS

GENERAL MANAGER

FINANCIAL REPORTING RISK CENTER MARKETING AND INFORMATION TECHNOLOGY AND FINANCIAL AFFAIRS COORDINATION BUSINESS DEVELOPMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT

IT System and Software Risk Center Project and Member Channel Development Unit Purchasing Management Unit Product Development Management Unit (Distribution Channels) Unit

IT System and Software Business Intelligence Product Management and Development Unit (Centralized Budget and Reporting Unit & Reporting Unit Development Unit Implementations)

Financial Affairs and Contract CRM and Channel IT Project Management Unit Management Unit Management Unit

Findeks Sales Business IT Service Management Unit Development Unit

IT Substructure and Analytical Model Operation Unit Development Unit

Corporate Communications Unit

Sales Management Unit

32 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 AUDIT COMMITTEE

INTERNAL AUDIT DEPARTMENT

IT Control Unit

Finance and Business Units Audit Unit

Member Audit Analysis and Coordination Unit

INTERNAL RISK COMMUNICATION HUMAN LEGAL LEGAL CONTROL MANAGEMENT CENTER RESOURCES COMPLIANCE AND CONSULTANCY DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT OPERATIONS UNIT UNIT

Information Information Human Resources Legal Compliance Systems and Security Unit Unit Control Unit Management Unit

Business Corporate Risk Administrative Operations Center Processes and Management Unit Affairs Unit Unit Financial Control Unit Process Security Unit Management Unit

MANAGEMENT 33

BUSINESS UNITS 12. BUSINESS UNITS

DUE TO KKB’S INCREASING INFORMATION TECHNOLOGIES »»IT Data Warehouse and Business Intelli- WORKLOAD AND ITS DEPARTMENT gence Applications CRITICAL POSITION IN THE This functionality is where all types of sys- IT System and Software tem and software development that sup- INDUSTRY, PERSONAL Development Unit ports analytical and reporting activities are SYSTEM AND SOFTWARE In 2017, the IT System and Software Deve- carried out. In 2017, this effort focused on lopment Unit’s intensive efforts continued completing the systems infrastructure to DEVELOPMENT UNIT with the aim of improving quality, safety, ensure the migration of reporting activities FOCUSED ON SYSTEM performance and infrastructure, as required to a centralized structure and enhancing by KKB’s ever increasing work load and its data quality to convert data into value. Data PERFORMANCE AND critical position in the industry. In addition to quality efforts worked to ensure the capa- ARCHITECTURAL developing new projects, maintenance and bility to spot errors that could occur in files IMPROVEMENT ACTIVITIES support activities of existing products con- transmitted by the members within a short tinued. Development of software to improve time. In addition, this work included forming IN 2017. the IT infrastructure and architecture was a Data Quality Monitoring Platform to report undertaken for other KKB units besides IT. these errors and convey them to members.

The Unit carried out various efforts within Findeks Datamart was created using the the following functions during the year: data of the Findeks application. This platform makes it possible to measure custo- »»IT Basic Bureau Applications mer tendency and present solutions that This function, which is responsible for the match the behavior. LCS (Limit Control System) and the score software, as well as Bureau Applications, The efforts within the Basel National Data KKB’s main operational area, continued wor- Pool project, which was planned to be es- king to meet industry needs while aiming to tablished with the data of participant banks, achieve a sustainable service level in light continued throughout the year. of the increased workload. Member integration of the New Generation of Personal »»IT Risk Center Practices Credit Rating (G5) was completed during The IT Risk Center Practices Unit is pri- the year and put into practice in March. The marily responsible for development of Corporate Bureau System, which continued software for Risk Center (RC) products. to operate this year to upgrade the infrast- In 2017, the Unit continued its activities in ructure, was launched in November. In ad- line with the set procedures, while adhe- dition to the existing data streams, data on ring to its quality and security improve- receivables for unpaid bills were collected ment approach. Integration with the API from telecom companies; the opening to Gateway infrastructure was completed for share project was completed in November access to all external services while work 2017. With this effort, communication with on the audit trail of RC applications was the REST Web service in the mainframe en- accelerated. vironment was realized for the first time.

HIGHLIGHTS

↗↗ Findeks Datamart was created using ↗↗ Member integration of the New Generation of the data of the Findeks application. Personal Credit Rating (G5) was completed during the year and put into practice in March.

36 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

IN 2017, THE IT FINDEKS AND »»IT Access and Payment Applications »»IT Findeks and Real Sector Applications REAL SECTOR APPLICATIONS The IT Access and Payment Applications In 2017, the IT Findeks and Real Sector App- Unit is mainly responsible for work related lications Unit added innovative services, UNIT ADDED INNOVATIVE to RC Services and KKB’s accounting and such as the QR Code Cheque Report, to the SERVICES, SUCH AS THE QR payment systems operations. In 2017, the Findeks platform, which is an external face Unit completed studies for the launch of to its private and real sector companies. CODE CHEQUE REPORT, TO the Loan Utilization Instant Sharing Servi- It also continued work to improve existing THE FINDEKS PLATFORM, ce (KAPS) project. Support for user mana- processes and services, in order to adapt gement processes specific to members to the increasing member base and com- WHICH IS AN EXTERNAL and their integration with new applicati- panies. Developments in the Findeks plat- FACE TO ITS PRIVATE AND ons continued throughout the year. The form continued during the year. In additi- REAL SECTOR COMPANIES. access, authorization, and user manage- on, significant efforts were conducted in ment modules of the application, which is a short time to develop a new project for IT ALSO CONTINUED WORK positioned within the audit management CBRT. TO IMPROVE EXISTING of the Risk Center members, are carried out as required by the Risk Center agre- The Unit was also responsible for develop- PROCESSES AND SERVICES, ement. ments on CRM Siebel Systems. It ensured IN ORDER TO ADAPT TO THE acceleration and improvement on reconci- INCREASING MEMBER BASE In 2017, integration with the API Gateway liation, return, cancellation processes for infrastructure was completed for access bank sales throughout the year. In 2017, AND COMPANIES. to all external services, while work on au- integration of new services with all banks dit trail of RC applications was accelera- was completed. Efforts will continue in the ted. coming period to transform these services into value-added products. »»IT Decision Support The IT Decision Support Unit is primarily »»IT Digital Platforms responsible for software development and The IT Digital Platforms Unit was establis- maintenance activities of KKB applications. hed within the Information Technologies In 2017, the Unit continued to be responsib- Department to meet KKB’s design and le for ERP Systems and worked on delivery development needs in the digital world, of the Performance Management System primarily the web. In 2017, the Unit carried via ERP Systems. New software was as- out maintenance work of KKB’s various sessed with a quality and security vision. web sites, including: www.kkb.com.tr, API gateway transitions of applications www.findeks.com, were completed, and software security www.hayaledingerceklestirelim.com, was improved. www.kkc.com.tr, and www.anadoluverimerkezi.com.tr.

The studies were completed for the launch of the Loan Utilization Instant Sharing Service (KAPS) project.

BUSINESS UNITS 37 TECHNOLOGY, INFORMATION SECURITY AND BUSINESS CONTINUITY WERE OUR STRATEGIC PRIORITIES IN 2017. ABDULLAH BİLGİN

38 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

During the year, the Unit renewed the Con- As of 2017, the Unit became responsible In 2017, KKB Anadolu Data Center started tent Management System (CMS), which for developing and maintaining java ba- the monthly transmissions of SLA Re- started development in 2016, the corpo- sed KKB applications, as well as develo- ports, Energy Consumption Data and Ca- rate web site, member portal and the ping mobile applications. During the year, bin Logs to three different customers. “You Imagine, We Realize” website. Under the Unit conducted refactor work in some these efforts, the Content Management of the java applications; it also tailored The Anadolu Data Center also continued System gained new features, including the applications to be compatible with to share the Service Bulletin, which is pre- questionnaire management, member ma- KKB quality and security standards. pared with data received from the KKBBY nagement, news management and docu- application, with the related department ment management. IT Service Management Unit managers via monthly reports. The Daily The availability reports of Risk Center and Service Quality Status Report is sent to Conducting all its development activi- KKB products and services continued the relevant groups at the end of each ties with Test Driven Development (TDD) to be shared with related persons on a work day. among its software engineering practi- monthly basis; meanwhile, the same re- ces, the Unit worked on more than 1,100 ports were shared on the Risk Center side IT Project Management Unit unit tests with a total coverage ratio ex- for 15-day and weekly periods. The KKB The IT Project Management Unit suppor- ceeding 90% for all the sites and applica- product/service catalog was updated ted the work of the Information Techno- tions it developed. and new services started to be reported logies Department and the needs of the to the related units and the management. entire KKB organization in 2017 through »»IT Mobile Technologies The product/service catalog updates three different disciplines. The IT Mobile Technologies Unit continued made on the Risk Center side were conc- software development and maintenance luded, mutually agreeing with TBB Risk »»IT Project Management Office efforts related to KKB mobile applications, Center. The availability reports continued Having been submitted to the IT Proje- its main area of responsibility. In 2017, the to be shared through the updated product Management Unit by business units, Unit also worked to improve the QR Code ct/service catalog. A catalog for internal the scope of these projects have already Cheque product. The API dependency of services was updated on the KKB side. been determined and their legal and regu- the QR Code product – which was deve- latory compliance have been evaluated. loped by Turkish engineers and started to The availability measurement and repor- The IT Project Management Unit then plan- be used in-country for the first time glo- ting of the Risk Center Member Audit Tra- ned, implemented and coordinated these bally – was assumed by the Unit to handle cking System (MATS) are continued. On projects in accordance with PMI metho- the updates and maintenance work. This the infrastructure side, server availability dology and KKB standards. The IT Project handover was a result of studies carried reporting is monitored and directed to the Management Unit, which focuses on plan- out by the IT Mobile Technologies Unit. relevant teams for necessary interventi- ning of all requests submitted by the bu- ons on a daily basis. siness units in line with PMI methodology, successfully realized all of the projects it The monthly SLA report of the SAP service planned by end-2017. offered to TBB by İnnova, and the monthly SLA report of the SAP service offered to TBB by KKB, continued to be delivered to TBB Risk Center. TECHNOLOGICAL ADVANCES IN THE DIGITALIZED WORLD

BUSINESS UNITS 39 12. BUSINESS UNITS

THE IT PROJECT The IT Project and Change Management In 2017, research, development and plan- MANAGEMENT UNIT Unit ensures that: all requests/projects ning were prioritized to move the test carried out within KKB are handled accor- automation work carried out in previous SUPPORTED THE WORK ding to a plan and prioritized correctly; years to a permanent infrastructure. This OF THE INFORMATION resources are used efficiently; a common was performed with a perspective of con- language and methodology are used on tinuity and sustainability of service qua- TECHNOLOGIES DEPARTMENT all projects launched within the organiza- lity as well as increased quality under the AND THE NEEDS OF THE tion; and project performance measure- software development lifecycle. To this ENTIRE KKB ORGANIZATION ments and lessons learned become part end, an automated and integrated sys- of organizational memory. This Unit is also tem was prescribed throughout the entire IN 2017 THROUGH THREE charged with keeping records of all chan- SDLC, from analysis to the transition pha- DIFFERENT DISCIPLINES. ge requests related to IT; evaluating risks se to the real environment. A test auto- associated with these requests; determi- mation infrastructure was planned for all ning the impact of these change requests; actors in the SDLC to contribute. With the submitting the requests and operating the existing structure, support continued for relevant approval mechanisms; and trans- automatically running 70% of the regres- ferring changes to the live site in a cont- sion tests, and an error-free version goal rolled manner. was achieved. The applications are sub- jected to regression tests with an end- »»IT Business Analysis and Test Manage- to-end testing perspective for all types of ment Unit infrastructure, software and configuration The IT Business Analysis and Test Mana- changes with the aim of achieving total gement Unit provided analysis and tes- quality. ting support to all project and software change requests submitted during the »»IT Technology Architecture Management year by taking into consideration the cur- The IT Technology Architecture Manage- rent functional and technical business ment Unit was established in 2017 to work requirements; screen requirements and on three key areas: operations; their impact on other sys- ›› Application Architecture – focuses on tems; authorization structure; information the applications needed by KKB and the- that needs to be accessed; target service ir relationship with each other; level; performance criteria; domain cont- ›› Infrastructure Architecture – specifies rols in screen and web services; and data how hardware and software infrastruc- requirements. Using a test automation ture, which will support the applications tool, the IT Business Analysis. and their relationships, should be con- figured. ›› Data Architecture – determines how corporate data sources should be organized and how to access to these sources.

The IT Project Management Unit successfully realized all of the projects it planned by end-2017.

40 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 THE IT TECHNOLOGY The corporate solution has been addres- IT Infrastructure and Operation Unit ARCHITECTURE sed in order to take the maturity level of »»KKB Anadolu Data Center Studies data architecture studies one step further. KKB is readying completion of its studies MANAGEMENT UNIT The solution was aimed to be in place wit- to establish a new Data Center that will ASSUMED THE hin KKB in 2018. serve the financial industry with Uptime Tier IV and LEED Platinium certification. In RESPONSIBILITY OF THE The IT Technology Architecture Manage- addition to the cabin hosting service for IT TECHNOLOGY STEERING ment Unit assumed the responsibility of the finance sector through the Data Cen- COMMITTEE, WHICH the IT Technology Steering Committee, ter, creation of a National Cloud platform is which convenes to contribute to IT de- aimed to guarantee that all kinds of data CONVENES TO CONTRIBUTE cision-making processes. The Unit now will stay within the borders of the country. TO IT DECISION-MAKING informs all stakeholders about the work underway or planned by ensuring that the In May 2017, KKB’s Emergency Center loca- PROCESSES. Committee meets periodically. The Unit ted at IBM’s İzmir Business Continuity Cen- aims to balance IT productivity and inno- ter was transferred to KKB Anadolu Data vations in business processes, create IT Center located in Ankara. The move was inventory and ensure its continuity. the result of rigorous planning and studies that commenced in September 2016. KKB’s In addition, the IT Technology Architectu- IT Infrastructure and Operations Units un- re Management Unit supported the use dertook intensive efforts to establish the of new technologies within KKB. As a de- corresponding systems operated by IBM monstration of its commitment to security, in İzmir to the Data Center in Ankara throu- the Unit ensured the positioning and dis- gh new investments. To ensure seamless semination of the API Gateway across KKB. work, installation of some critical systems It also provided the opportunity to offer was completed in Istanbul and the related services to members, via this platform th- systems were moved to Ankara via speci- rough a dual component security infrast- al modes of transport. Installation of the ructure. The big data platforms were posi- newly engaged systems was carried out in tioned to centralize KKB application logs. Ankara. In addition, some of the systems Planning and research studies continue to that were invested recently in İzmir were establish an infrastructure, through which directly transported from İzmir to Ankara applications will work on an active-acti- via special methods of transportation. ve basis from the point of view of service continuity.

HIGHLIGHTS

↗↗ In 2017, KKB Anadolu Data Center started ↗↗ Structure, support continued for ↗↗ The big data platforms were the monthly transmissions of SLA Reports, automatically running 70% of the positioned to centralize KKB Energy Consumption Data and Cabin Logs to regression tests, and an error-free application logs. three different customers. version goal was achieved.

BUSINESS UNITS 41 12. BUSINESS UNITS

AFTER THE TRANSITION TO Parallel to the removal efforts of ODM, the »»System Infrastructure Management AN ARCHITECTURE WHERE information technologies equipment (ma- After the transition to an architecture ALL APPLICATIONS RUNNING inframe, disk, cabling infrastructure) at where all applications running on the ma- İstanbul Data Center were renewed and inframe infrastructure in KKB can operate ON THE MAINFRAME 2017 requirements were met. The data 24/7, the Corporate Bureau Service (CBS) INFRASTRUCTURE IN center was upgraded to the SAN director infrastructure was transferred to the rela- infrastructure and an open systems disk tional database (DB2) infrastructure. This KKB CAN OPERATE virtualization infrastructure (SVC) was int- modification resulted in significant gains 24/7, THE CORPORATE roduced. in terms of both technology and performance. BUREAU SERVICE (CBS) After the various transports were comp- INFRASTRUCTURE WAS leted, efforts continued on data replica- The application for collecting audit logs, TRANSFERRED TO THE tion and closed-loop testing for weeks which deploy active-active multi-data- and multilayered tests were performed. center, by using Open Source NoSQL and RELATIONAL DATABASE (DB2) The removal was carried out entirely with message queuing technologies on the INFRASTRUCTURE. THIS KKB’s internal resources without the con- Open Systems and Database infrastruc- sultancy of any external firm. The entire tures, was launched in 2017. Utilization of MODIFICATION RESULTED IN operation was completed in May, one such advanced technologies, developed SIGNIFICANT GAINS IN TERMS month earlier than planned. by the world’s leading high-tech provi- OF BOTH TECHNOLOGY AND ders, was a very successful step that Under “Rendering of KKB services via the could lead to the spread of other projects PERFORMANCE. Extraordinary Situation Center for one within KKB. whole day” practice, which was repeated for the fourth time in 2017, both the Open Some internally used applications, which Systems and the Mainframe environ- serve through the Docker Container inf- ments were rerouted to the systems lo- rastructure that forms the basis of cloud cated in the Extraordinary Situation Cen- applications, were effective in establis- ter (ESC) in Ankara. On October 28, 2017, hing the “cloud vision” within KKB. all KKB services were provided from ESC for one entire day, and all operations were conducted below the predefined RTO and RPO values.

HIGHLIGHTS

↗↗ Under “Rendering of KKB services via the ↗↗ The information technologies Extraordinary Situation Center for one equipment (mainframe, disk, cabling whole day” practice which was repeated infrastructure) at İstanbul Data Center for the fourth time in 2017. were renewed.

42 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 THE PRODUCT MANAGEMENT MARKETING AND BUSINESS DE- From the moment the membership process AND DEVELOPMENT UNIT VELOPMENT DEPARTMENT begins, Member Channel Management aims to stand by KKB members, whenever they ASSUMES KEY TASKS IN Member Channel Management Unit are in need. The Unit forwards all kinds of THE LAUNCH AND TRACKING Member Channel Management is respon- feedback and suggestions obtained from sible for managing KKB’s relations with the the member base during one-on-one visits, OF MANY HIGH-VALUE financial industry. Believing in the importan- working groups, and via the website that it PRODUCTS AND SERVICES. ce of reaching out broadly in today’s world maintains. These efforts ensure that KKB and being always accessible, KKB reaches products and services are shaped within THE UNIT ALSO TAKES INTO out to the financial sector via the channels the framework of the feedback and sugges- ACCOUNT SUGGESTIONS positioned under the Member Channel Ma- tions received. FROM BOTH MEMBERS AND nagement team. Product Management and Development EMPLOYEES WITHIN KKB. The team serves consumer financing com- Unit panies, factoring and financial leasing firms, Product Management and Development con- asset management companies, Borsa Istan- ducts activities related to preparing KKB and bul, Agricultural Credit Cooperative, and cre- Findeks products and services, following up dit insurance companies that are members their systematic development, and bringing of the Risk Center. Member representatives them to the usage stage. are assigned to each institution and maintain one-to-one contact with the individual The evaluations and studies carried out by members. They ensure that these members KKB regarding its products and services are familiar with KKB and Risk Center servi- carefully consider the needs of banks and ces while supporting them to benefit from other financial institutions. This approach these service offerings in the best way pos- allows for the preparation of new projects, sible. evaluation of user suggestions, fulfillment of user needs, and the modification of existing Taking into account the rapid technological products. development and the widespread use of the Internet, KKB uses the website managed by Aiming to facilitate financial transactions the Member Channel Management team and both in the finance industry and the real specifically designed for members as infor- sector with KKB and Findeks products, The mation, notification and feedback channel Unit is divided into six main divisions: KKB about the KKB and Risk Center products. Product Management, Findeks Product Ma- nagement, Usability and Interaction Design, In addition to the management of the mem- Training Design and Planning, Product Deve- ber relations, Member Channel Management lopment, Process Management, and Busi- regularly monitors the sales performance of ness Development. the budget and products, while making sure the necessary efforts are undertaken to extend KKB and Risk Center services. Believing in the importance of reaching out broadly in today’s world and being always accessible, KKB reaches out to the financial sector via the channels positioned under the Member Channel Management team.

BUSINESS UNITS 43 WE REDUCE INSTITUTIONS’ OPERATIONAL COSTS WITH OUR VALUE-ADDED PRODUCTS AND SERVICES. İNCİ TÜMAY ÖZMEN

44 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

THE CORPORATE Product Management and Development ma- dia plans in line with the communication COMMUNICATIONS UNIT inly executes sales, product management, strategies, and renewed the content and development and planning activities for all design of the corporate website. Spon- IS RESPONSIBLE FOR Findeks products that are open to use by sorship activities were carried out within CREATING, MAINTAINING AND the real sector, banking and individual cus- sector-specific events and press meetin- tomers. It also conducts product manage- gs were organized during the year. Throu- PROTECTING THE BRAND ment, development and planning activities ghout the year, the Unit carried out many IDENTITY OF KKB AND ITS for all KKB products that are open to use by internal and external activities to promote SUB-BRANDS. banks and financial institutions. KKB and its products and services. Offering a wide range of products to its KKB continues to execute corporate soci- users, KKB continues to work intensively al responsibility projects at full speed. In on its communication channels to ensu- 2017, the fourth edition of the “You Imagi- re efficient interaction with users, while ne, We Realize” competition was succes- developing and expanding the number of sfully completed. This effort also aims to such channels. These include the website, initiate one of the highest-ranking projects mobile application, customer communi- within the competition. Health screening cation center, banking and strategic busi- of seasonal agricultural workers and the- ness partnership channels, through which ir families in Çukurova Region has been it reaches both the financial industry and conducted since 2015 as part of the “If You the real sector as well as individuals. Are There, We Too Are There” initiative. Sin- ce 2016, the “Audio Question Bank” effort Corporate Communications Unit has ensured that visually impaired people The Corporate Communications Unit is have equal opportunity in education and responsible for creating, maintaining and that they can be just as prepared as ot- protecting the brand identity of KKB and its her candidates for university exams. Co- sub-brands. To that end, the Unit conducts operation with the Association of Visually internal and external communication ac- Impaired in Education continues to enable tivities with marketing, digital marketing, access to the question banks voiced by media relations, reputation management, volunteer KKB employees throughout Tur- event and sponsorship management, me- key. Additionally, the Unit continued to sup- dia planning, marketing and business de- port the activities of internal social clubs velopment teams. that aim to strengthen organizational culture; encouraged voluntary participation in As part of communication efforts related to social responsibility projects; and carried KKB and Findeks, product and service pro- out CSR projects in collaboration with civil motional materials were created. In 2017, society organizations. KKB launched the Findeks QR Code Cheque advertising campaign, formulated me-

SPECIAL PRODUCTS AND SERVICES TAILORED TO MEET THE NEEDS OF MEMBERS

BUSINESS UNITS 45 12. BUSINESS UNITS

CRM AND CHANNEL CRM and Channel Management Unit ms. In addition, in 2017, the Unit continu- MANAGEMENT OPERATES CRM and Channel Management operates ed campaign management practices to with a focus on new customer acquisition offer products and services, undertook WITH A FOCUS ON NEW and with the aim of increasing the loyalty intensive studies to develop and improve CUSTOMER ACQUISITION of existing customers by placing them at channel infrastructure, and focused on the focal point of the strategy. The Unit data warehouse projects that will lay the AND WITH THE AIM OF also works to ensure that the right pro- groundwork for analytical studies. Thanks INCREASING THE LOYALTY duct is offered to the right person, at the to the consultancy services that the Unit right time. To this end, it continues to de- received, it gained customer orientation, OF EXISTING CUSTOMERS BY velop new communication channels and and also reflected its innovative approac- PLACING THEM AT THE FOCAL improve existing ones by monitoring te- hes and efforts to its designs, to support POINT OF THE STRATEGY. chnology developments and trends. the purchase and use of the product on digital platforms. CRM and Channel Management are in charge of the activities with the aim of: The Unit renewed the web site, which is ›› Determining strategies for the presen- a promotional platform for the range of tation and dissemination of Findeks services specifically offered to KKB mem- products on digital platforms; bers. The upgrade turned the web site ›› Following technology developments, into a user portal. The Unit also initiated trends and customer demands in line necessary work to create a communica- with these strategies, adaptation and tion database for KKB members, ensuring pursuit of identified needs to digital quick and effective communications. channels ›› Developing, implementing, monitoring The Unit held one-on-one interviews with and reporting effective customer and persons in charge of related digital plat- campaign management techniques by forms of the banks. In line with the feed- combining intelligent technologies with back received, the Unit modified and en- analytical approaches; hanced the notifications where Findeks ›› Improving performance using innova- takes place. This effort helped increase tive digital publicity methods and fol- awareness of the member institutions lowing trends. and the real sector about the Findeks platform and the products it provides. Throughout 2017, the Unit focused on providing Findeks campaign manage- Analytical Model Development Unit ment activities, which included targeting Established in 2013, the Analytical Model and segmentation studies supported by Development Unit’s activities are focused analytical approaches. These campaig- on five areas: Statistical Model Develop- ns were mainly offered through digital ment, CRM Analytics, Data Quality, Cent- channels and digital marketing platfor- ral Decision Support Systems and Fraud

CRM and Channel Management have helped increase awareness of the Findeks platform and products offered, in the eyes of both member institutions and the real sector.

46 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 Prevention. In addition to ensuring the banks jumped 212% compared to the pri- Unit is in constant contact with its coun- continuity of existing risk prediction (sco- or year, while the turnover target for 2017 terparts in the sector. This effort aims to ring) models, the Analytical Model Deve- was realized at 156%. In 2018, the sales ac- improve the quality of KKB’s products and lopment team has built new models to tivity of this channel will be improved by services through the feedback it receives, respond to the needs and requests of KKB increasing Findeks’ new customer acqui- in addition to generating solutions to iden- members. Placing great importance on sitions and existing customer penetration. tified needs. innovation, the Unit plans to introduce its More than 15 thousand visits were made various applications – including the Per- by Findeks Communication Consultants, As a result, KKB members in the automo- sonal Credit Rating, Personal Indebted- who are in charge of improving Findeks tive leasing sector, which was included ness Index, Cheque Score, Commercial awareness and product/process knowle- in the scope of service in 2014, started Credit Rating, Personal Collection Score, dge through one-on-one meetings via the to provide services to their customers by Personal Inclination Score and Customer banking branch channel. With the launch using Findeks reports in 2017. This service Loyalty Score – to a wider audience. of the Field Tracking mobile application, provides significant advantages in mana- which is designed to track and report on ging financial risks of the sector’s compa- In addition to banks and financial institu- sales activities, institutionalization of the nies. It is also beneficial to individuals who tions, the Central Decision Support Sys- sales activities was provided. The app al- lease cars by introducing them to Findeks tems applications were also made avai- lows for coordination of teams in the field Credit Rating, Cheque and Risk Reports. lable to factoring companies and the real and feedback with instant reports to the sector. As a result, decision-making that bank/branch point. In 2017, Findeks Credit Rating started to be involves risks became faster, more con- used in the insurance sector for pricing sistent and more accurate. KKB launched Under sales management efforts, the Bu- car insurance policies. The slogan “Dis- the first False Application Detection and siness Partnership Channel is expected to count on the insurance policy of those Prevention Service in Turkey. In 2018, KKB expand Findeks products and packages to having good Findeks Credit Rating” pa- aims to expand the use of this service the extreme points. The channel will facili- ved the way for people to recognize the and to introduce new systems based on tate the development of business models advantages of Findeks Credit Rating. Me- advanced technology to maximize fraud together. Prospective partners include the anwhile, IBAN-TRID and Mobile Phone-TRID prevention and continued studies during industry’s leading software houses, which verification services, which were and con- the year. The Unit also launched Loan Utili- have widespread customer networks, ERP tinued to be developed for the insurance zation Instant Sharing Service (KAPS) and solution partners, operators, e-commerce sector under the verification services Fraud Information Sharing Platform. sites that have a wide customer base, and category, were offered for the use of the fintech firms. insurance industry. Sales Management Unit To realize the strategic sales targets of Findeks Sales Business Development Thanks to Findeks reporting and innova- Findeks, the Sales Management Unit pro- Unit tive offerings such as sales with install- vides access to the target audience of the Since its inception in 2014, the Findeks Sa- ment payments in the white goods sector, Company’s products. The Unit uses distri- les Business Development Unit has wor- advantages were provided to the related bution channels of member banks as well ked in conjunction with real sector pla- sector and end consumer. In addition, Fin- as business partnerships specifically es- yers, public institutions and agencies, and deks became an indispensable adviser in tablished to develop Findeks sales. civil society organizations to foster trans- the second-hand car market during sales parency in conducting business in Turkey with installment payments. In 2017, the Banking Channel worked to and to encourage risk management of re- increase its effectiveness, in line with its ceivables by depending on rational data. The Findeks Sales Business Development goal of boosting the number of customers Unit will continue to serve the non-finan- who use Findeks. This effort also aimed to In 2017, the Findeks Sales Business Deve- cial sector with the same precision in the directly promote financial literacy and rai- lopment Unit continued to represent KKB coming period. se awareness of risk management among in non-finance sectors, create and deve- businesses and individuals. A total of 10 lop new markets and new businesses. The banks intermediated the sale of Findeks packages this year. Sales generated by

BUSINESS UNITS 47 WE DELIVER UNINTERRUPTED SERVICE WITH A CUSTOMER- ORIENTED PRODUCT APPROACH.

GÜRKAN PLATIN

48 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

THE FINANCIAL AFFAIRS AND FINANCIAL REPORTING AND FI- ports with related business units and the CONTRACT MANAGEMENT NANCIAL AFFAIRS DEPARTMENT public, the Unit precisely carried out tax responsibilities on time. UNIT SUCCESSFULLY Within the strategic targets of KKB and ›› Additionally, the Unit planned cash flow in CARRIED OUT ACCOUNTING legal regulations, the Financial Reporting a way that generates optimal benefit and and Financial Affairs Department’s main closely followed all changes to financial AND FINANCE OPERATIONS objectives include planning of financial laws, rules and regulations, and made ar- IN 2017, BY TAKING INTO activity; monitoring and recording the re- rangements as needed and filed monthly, sults of activities systematically, in accor- quarterly and annual tax returns as requi- ACCOUNT THE PROCEDURES dance with the timely and accurate fulfil- red by the Tax Law. AND PRINCIPLES RELATED lment of obligations related to financial ›› The Financial Affairs and Contract Mana- TO THE ACCOUNTING activities; and reporting by taking public gement Unit monitors collections and re- interest into account. ports its findings to relevant departments STANDARDS, AS WELL AS to ensure efficient resource utilization and LEGISLATION AND COMPANY The responsibilities of the Department planning. include carrying out tax issues, perfor- ›› The Unit paid the expenses related to the POLICIES. ming cash flow analysis to derive opti- maintenance, insurance expenses for the mum benefit; providing necessary reports maintenance of assets and repairs of fixed to senior management; and compiling assets, project expenditures, management and submitting information, documents, and general expenses; it also fulfilled its and reports required by public authorities, financial liabilities arising from applicable quickly ensuring all kinds of support nee- laws and contracts. ded by the operational units within the le- ›› As an organization subject to the regulation gal and regulatory framework so they can of the Banking Regulation and Supervision entirely focus on their areas of expertise Agency (BRSA), all legal reporting and inde- and maximize their efficiency. pendent external audit work conducted at Turkey Accounting and Financial Reporting Financial Affairs and Contract Mana- Standards was supported. In addition to gement Unit these activities, all the opinion requests The Financial Affairs and Contract Mana- coming from within KKB was answered wit- gement Unit successfully carried out ac- hin the framework of tax legislation. counting and finance operations in 2017, ›› All monetary and financial operations con- by taking into account the procedures tinue to be executed successfully for KKB and principles related to the accounting Anadolu Data Center, which commenced standards, as well as legislation and operation in Ankara, and for its clients. Company policies. To this end: ›› In addition to preparing financial reports in line with rules and regulations set forth by public authorities and sharing these re-

The Financial Reporting and Financial Affairs Department plays an active role in the strategic decision-making process by providing instant information and reporting.

BUSINESS UNITS 49 12. BUSINESS UNITS

AS A RESULT OF EFFECTIVE Budget and Reporting Unit Procurement Management Unit IMPROVEMENT EFFORTS In 2017, the Budget and Reporting Unit car- In 2017, the Procurement Management Unit ried out the following activities: successfully carried out purchasing acti- REGARDING KKB NEEDS, ›› Provided assistance in formulating the fi- vities in accordance with KKB’s corporate PROCUREMENT COSTS WERE nancial strategy, harmonizing financial ma- structure, audit processes and procedures. nagement and control systems; preparing The existing ERP system processes were REDUCED SIGNIFICANTLY IN the budget in line with KKB’s policies and modified to ensure more efficiency. 2017. goals; performing budget implementation and control. The Unit started to monitor all suppliers on ›› Established the principles to be taken into ERP system via Supplier Catalogue acti- account by business units included in the vities. Information about support service consolidated budget during budget prepa- providers was also updated in 2017 with ration; coordinated the budget preparation all missing documentation completed. The process. Unit reviewed and indexed all KKB cont- ›› Reviewed the budgets prepared by busi- racts, took over the contracts from other ness units to ensure their conformity to fi- departments and integrated them into the nancial plans; created a financial scenario existing contract structure. In addition, by consolidating budgets; and presented improvements were made in contract pro- it to the Board of Directors, explaining the cesses and transactions were made faster rationale. and in a more controlled manner. ›› Ensured that the budget is implemented in accordance with the goals described in the As a result of effective improvement efforts annual financial plan and carried out work regarding KKB needs, procurement costs related to the actualized budget. were reduced significantly in 2017. ›› Reviewed additional and extraordinary requests submitted by the departments in line with emerging needs; made year-end estimates; and prepared a new budget for the requests deemed appropriate. ›› Compiled income and cash flow data and evaluated them against the expense budget; prepared a detailed income and expense budget by taking into account the cash flow statement prepared at the beginning of each fiscal year; revised these plans as necessary and monitored them for each department. ›› Ensured dissemination of fast and effective information flow in the most accurate way, with all business units within KKB and senior management and verified the accuracy of data in the MIS systems. ›› Undertook feasibility studies for new projects and products; and oversaw their management within KKB to ensure the implementation of an appropriate strategy. ›› Measured financial performance across the organization and advised senior management accordingly.

50 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

WHILE RISK CENTER PROJECT RISK CENTER COORDINATION ›› Providing necessary support for mem- AND PRODUCT DEVELOPMENT DEPARTMENT bers in relation to the products and services; LAUNCHED 13 PROJECTS The Risk Center Coordination Department is ›› Ensuring communication between the IN 2017, THE UNIT CARRIED responsible for activities carried out by KKB Risk Center, member organizations, and on behalf of TBB Risk Center. The Depart- KKB. OUT ABOUT 200 FURTHER ment consists of the Project and Product DEVELOPMENTS RELATED Development, and Business Intelligence While Risk Center Project and Product De- and Reporting Units. In addition to data velopment launched 13 projects in 2017, the TO EXISTING PRODUCTS AND collection and sharing functions, which are Unit carried out about 200 further deve- SERVICES, ENRICHING THE core bureau activities, Risk Center Coordi- lopments related to existing products and QUALITY AND CONTENT OF nation also focuses on the development of services, enriching the quality and content new products and services that will create of the offerings. THE OFFERINGS. added value for the member institutions. The Department’s primary aims include re- In 2017, the Unit’s major projects included: ceiving new data and services both from ›› The receipt of member merchant turno- private and public sources, and developing ver monthly and on a consolidated basis new products over existing data for the ne- from the BKM, and inquiry by the mem- eds of members in line with KKB’s strate- bers through the web service and web gies, in coordination with the Risk Center. screen, On the business intelligence side, regular ›› Offering the Early Warning Service for in- reports are produced on the collected data, dividual and commercial customers who and statistics are published. Additionally, are also notified by RC members, related efforts to improve the quality of the data to the negative notices of different insti- are continuously carried out. tutions for cheques, bonds, credit insurance and tender bans. Risk Center Project and Product Deve- ›› Receipt and sharing of information re- lopment Unit lated to cheque-banned persons dire- Risk Center Project and Product Develop- ctly from UYAP as per the changing law, ment is responsible for: and from the courts for decisions taken ›› Collecting data from financial instituti- before July 2010. Data diversity of the ons, which are Risk Center members, Corporate Bureau was increased, and and other sectors, on behalf of the Risk necessary infrastructure for the facto- Center; ring, financial leasing and asset mana- ›› Developing products and services that gement companies to be included in the will offer the collected data for the use of system was taken to the production en- Risk Center member institutions; vironment; ›› Realizing the improvement suggestions ›› Providing monthly notification of per- from the Risk Center and its members re- sonal information and communication garding existing products and services; data, which is reported only at the opening of an account in CRS,

Risk Center Coordination focuses on the development of new products and services.

BUSINESS UNITS 51 WE ENSURE THAT KKB’S PRODUCTS AND SERVICES ARE IN COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS.

ERŞAN RASİM HOŞRIK

52 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

BUSINESS INTELLIGENCE ›› Monthly notification of customers who at the highest level. Besides being commit- AND REPORTING IS are exposed to events defined as Force ted to automation and innovation, the Unit’s Majeure, by all members; individual inqu- staff is equipped with both technical skills ORGANIZATIONALLY iry through the screens; and sharing via and banking know-how. AFFILIATED TO THE RISK monthly FTP, ›› Reporting individual inquiries carried Business Intelligence and Reporting’s core CENTER COORDINATION out by members based on the number, activities include the portal and GeoMIS pro- DEPARTMENT AND CONDUCTS application and member user on a daily, ducts offered to KKB members through Orac- monthly and annual basis with the Indi- le BI; all reports and bulletins that are offe- BUSINESS INTELLIGENCE vidual Inquiry Unit Reporting applicati- red to the public via the Risk Center website; AND REPORTING ACTIVITIES on, generating the Summary and Detail information on paid and unpaid cheques, WITHIN KKB. Report, and Trend Analysis Report and protested bills and credits of all the financial related warnings and sharing them with industry. members on a daily basis. One of Business Intelligence and Reporting’s Business Intelligence and Reporting most basic functions is to plan and execute Unit the activities required to control, measure Business Intelligence and Reporting is or- the quality of, and improve the data, which ganizationally affiliated to the Risk Center is the main raw material of all the products Coordination Department and conducts bu- and services offered both by KKB and the siness intelligence and reporting activities Risk Center. within KKB. It has responsibilities to both KKB and the Risk Center (RC) of TBB.

With its reporting responsibility, KKB aims to shed light on the strategic decisions that the Risk Center and the Turkish financial industry will make, while executing all its services with a business intelligence perspective and using today’s advanced technologies

BUSINESS INTELLIGENCE AND ACCURATE REPORTING FOR A SAFE FUTURE

BUSINESS UNITS 53 12. BUSINESS UNITS

USING THE LATEST INTERNAL AUDIT DEPARTMENT In 2017, studies for the professional audit TECHNOLOGY, THE INTERNAL of the license inventory commenced by ta- IT Audit and Business Processes Au- king into consideration the physical assets AUDIT DEPARTMENT dit Units inventory of KKB Headquarters and the IMPLEMENTS THE The Internal Audit Department conducts KKB Anadolu Data Center, as well as KKB’s its activities under the supervision of the growing application inventory. Using the la- MONITORING OF FINDINGS Audit Committee. The Department succes- test technology, the Internal Audit Depart- AND OPERATIONS THROUGH sfully completed 2017 Process and Ma- ment implements the monitoring of findin- nagement Statement Audits, in line with gs and operations through the RSA Archer THE RSA ARCHER GRC the Audit Plan approved by the Board of GRC system. The Department reports the SYSTEM. THE DEPARTMENT Directors. In 2017, the studies of the Mana- results to KKB and TBB RC management on REPORTS THE RESULTS gement Statement and the audits of the a monthly basis. support services organizations were con- TO KKB AND TBB RC ducted for the fourth time with the partici- Member Audit Analysis and Coordina- MANAGEMENT ON A MONTHLY pation of the Internal Audit Department. In tion Unit regard to the referenced efforts, the 2017 The Risk Center Member Audit Tracking BASIS. Management Statement Report of KKB System, which has ensured centralized and Management Statement Report Rela- management of member audits since 2016, ted to the Risk Center Operations Carried serves all member organizations and inde- Out by KKB were prepared. The reports pendent audit companies via e-signature were shared with the Independent Audit verification and dual component authenti- Company and TBB Risk Center. In addition, cation infrastructure. QAR International Quality Assurance work is undertaken over two-year periods; the- Information related to paid bills is shared se activities were initiated in 2017. with all RC members, regardless of whether they are a customer or not, via web screen In 2017, KKB Anadolu Data Center physi- application and based on individual inquiry. cal security, operational management and procurement audits were conducted. As a result of analysis and evaluation stu- Scenario-based analysis studies such as dies made by the Unit, risk performance the Service Breakdown Root Cause Analy- of member organizations can be tracked. sis and spot reviews were completed. In With the rising awareness, the maturity addition, 29 IT and business unit process level was increased in the presence of audits were completed, primarily on Mem- member organizations during the security, ber Access, Segregation of Duties in bu- integrity and authenticity process of Risk siness processes, Operational Demand Center data. Management and Communication Center processes, which are based on the ser- In accordance with the Circular issued by vice continuity and information security TBB RC in 2017, on-site review studies were requirements of KKB. initiated by the member review team established within the Unit.

In accordance with the Circular issued by TBB RC in 2017, on-site review studies were initiated by the member review team established within the Unit.

54 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

KKB MANAGES STRATEGIC, RISK MANAGEMENT DEPARTMENT KKB’s strategy is to bring its information se- OPERATIONAL, FINANCIAL, curity infrastructure and processes to the Placing great importance on maintaining su- level of the most mature companies in this AND REPUTATIONAL RISKS perior quality standards in all its activities, KKB area. To this end, KKB continued investments IN ACCORDANCE WITH manages strategic, operational, financial, and in information security infrastructure in 2017, reputational risks in accordance with interna- while contributing to the sector with exemp- INTERNATIONAL RISK tional risk management standards (e.g. COSO lary studies and sharing. By establishing an MANAGEMENT STANDARDS ERM, ISO 31000). The Risk Management De- independent security monitoring team under partment operates directly under the General the Information Security Unit, the maturity le- (E.G. COSO ERM, ISO 31000). Manager and reports to the Audit Committee. vel in detecting and tracking the cyber risks The Department works to assess risks and op- and threats was increased. In addition, the portunities that should be managed by taking number of security-focused staff was doubled into consideration the reason of KKB’s exis- compared to the previous year. Under the hu- tence, in terms of the organization’s strategic man-focused information security approach, targets. It also ensures that KKB products and information security awareness studies rela- services are offered in the most effective, ef- ted to current events and global threats conti- ficient and controlled manner. On the corpora- nued at full speed in 2017. te front, strategic planning/targeting and risk management activities are carried out. Tech- KKB’s risk management policy includes the fol- nically, risk studies compatible with the Infor- lowing activities: mation Security Management (ISO 27001) and ›› Defining KKB’s primary business goals, Business Continuity Management (ISO 22301) ›› Identifying threats that may hinder KKB from standards are undertaken. achieving its goals, ›› Identifying risks that may give rise to such As part of efforts to ensure business continu- threats and ascertaining the potential im- ity and information security, KKB successfully pact and likelihood of such risks, passed the renewal audits for ISO 27001 and ›› Implementing risk management and cont- ISO 22301 certifications in 2017, which were rols as necessary to reduce risks to levels obtained in August 2014. In addition to tech- determined by senior management, nological and work flow improvements in the ›› Establishing the coordination and commu- areas of risk management, information se- nication network necessary for risk mana- curity, strategic planning and process management within KKB, gement, business continuity and emergency ›› Proactively assessing new risks that may tests were successfully conducted in October. emerge in credit recording and information technology systems, and developing re- The IT and business processes related to all commendations on mitigation of potential KKB activities are established and carried out risks, under the COBIT framework, the ISO 27001, ISO ›› Providing KKB executives with training prog- 22301 standards and the Communiqué on the rams on risk management on a regular ba- Principles Applicable to Management of In- sis and raising employee awareness, formation Systems of Information Exchange, ›› Determining and regularly reviewing key risk Clearing and Settlement Entities and on the indicators to measure and monitor existing Audit of Business Processes and Information risks. Systems. KKB aimed to implement a corporate structure where analyses of the efficiency and This policy is supported with written proce- optimization of all institutional processes can dures and job definitions; the first-level cont- be carried out over an electronic environment. rols of risks identified by business units in the This was achieved with implementation of the course of daily activities; and the periodic eva- Process Management application launched in luation of risk management activities by seni- November. Thanks to this transformation, a big or management. step was taken toward institutional transparency.

BUSINESS UNITS 55 WE ACT TOGETHER TO MOVE KKB FORWARD INTO FUTURE. HAKAN GÜMÜŞ

KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

GENDER DISTRIBUTION HUMAN RESOURCES DEPARTMENT In 2017, KKB formulated a Code of Condu- ged its human resources communication ct that defines its corporate values and motto to “Being Us.” With this change, the FEMALE MALE corporate culture by taking into conside- corporate culture of the KKB was also na- 38% 62% ration KKB’s vision, mission, strategy and med. priorities. In addition, KKB created an entirely new human resources management The Understanding of Cooperation’s main approach shaped by corporate strategies concepts specific to the organization and culture. All management functions of have been established to take the cur- human resources were made transparent rent working environment to a level where and put down in writing. A new career ma- staff motivation and loyalty are increased nagement model called “Ideal” was also and employee performance is raised. All initiated. the conditions that will enable employees moving toward the same target to create Under these efforts: added value and synergy together have been identified. EDUCATION LEVEL ›› Core competencies specific to the organization were determined and a title-ba- The amount of communication between sed Competence Inventory and a Code employees and senior management has HIGH UNIVERSITY of Conduct were prepared. been increased with the establishment SCHOOL AND ABOVE 25% 75% ›› Recruitment of qualified human resour- of new communication platforms. These ces by using objective measurement platforms allow the staff to freely express and evaluation tools, and selection of their opinions, suggestions and requests candidates for the right position were related to KKB’s practices. ensured. ›› The Corporate Career Map was desig- “Tete-a-Tete with the General Manager” ned by creating a written and transpa- meetings where employees have the op- rent career management model. Promo- portunity to talk with the General Manager, tion criteria were institutionalized, all “This Side of Business “ meetings with the career paths were clearly drawn, and Deputy General Managers, and “Between the competencies required at each ca- HR and Us” with the Human Resources De- reer move were defined. partment are examples of the referenced ›› In performance management, a feed- new communications platforms. back-based culture was created by making open communication mandatory Thanks to these efforts, KKB has a stronger during performance discussions. Also, and more transparent human resources Profile of Human Resources an objective performance evaluation in- corporate governance approach shaped ›› TOTAL NUMBER OF EMPLOYEES frastructure was established. by institutional values and culture that ta- 357 ›› At KKB, all educational management ac- kes into account the vision, mission, stra- tivities have been centralized under the tegy and priorities of the organization. In ›› AVERAGE AGE responsibility of the Human Resources addition, KKB has fostered a working envi- 35 Department. Professional and personal ronment that increases employees’ moti- development needs have been deter- vation, loyalty and performance. mined for each position and a Training ›› NUMBER OF EMPLOYEES WHO Management System has been estab- As a result of the implementation and pro- STARTED WORK IN 2017 lished by forming a Training Inventory cess improvement activities carried out 84 tailored for KKB and Needs Analysis on during recruitment under the new human a personal basis. resources model, KKB hired 84 qualified ›› AVERAGE NUMBER OF TRAINING DAYS ›› An effective and fair remuneration sys- employees in 2017. With these new staff PER EMPLOYEE IN 2016 tems infrastructure has been establis- members, the total workforce expanded to 7 DAYS hed to promote performance. 357. A total of 2,500 hours of training was organized for the professional and perso- Acting on the responsibility of “Being One, nal development of employees during the ›› MARITAL STATUS Being Together” in order to move the orga- year. In the same period, KKB recorded an 33% SINGLE 67% MARRIED nization forward into the future and achie- employee turnover rate of 7%. ve the desired success level, KKB chan-

BUSINESS UNITS 57 12. BUSINESS UNITS

A TOTAL OF 575 THOUSAND COMMUNICATION CENTER nings were planned and initiated based CALLS WERE MANAGED DEPARTMENT on the evaluation outputs. The training has a rate of 300 person/day training in THROUGHOUT 2017 AT AN In line with KKB’s product and service total. Quality development activities will 89% SERVICE LEVEL AND strategies, the Communication Center De- also continue in 2018. partment focuses on two main business 98% COVERAGE RATIO. A lines: Member Communication Center and In parallel with KKB’s ever improving pro- TOTAL OF 102,500 WRITTEN Customer Communication Center. The duct range, the Department strengthened NOTIFICATIONS WERE Department aims to present services to its first level service group with a techni- existing members and customers in kee- cal support team. The aim was to more RECEIVED BY KKB VIA ping with the high standards of KKB. The effectively support the members in deve- E-MAIL AND WEB FORMS Communication Center is committed to lopment and modification processes. meeting the demands from the members THROUGHOUT THE YEAR; and customers as soon as possible and Reports prepared by the Department in THESE WERE ANSWERED AT A at the highest quality. To ensure mem- line with requests are based on feedback 91% LEVEL. ber and customer satisfaction, KKB uses received from members and customers. its advanced technology facilities in the These reports are regularly shared to pro- most effective manner. In addition, it provide analytical input for the product and vides for continuous development of the process development plans of the strate- human resources who provide this servi- gic product management units. ce. Member Communication Center (MCC) A total of 575 thousand calls were mana- The MCC’s objective is to provide accu- ged throughout 2017 at an 89% service rate and prompt answers to member level and 98% coverage ratio. A total of requests. The Center continued to ope- 102,500 written notifications were recei- rate under this guiding principle in 2017. ved by KKB via e-mail and web forms th- During the year, the number of notifica- roughout the year; these were answered tions increased 10% compared to 2016, at a 91% level. while the number of phone calls reached 40 thousand. Despite this increase, the Responses given to members and custo- average record-closing time was mainta- mers through verbal and written commu- ined at 1.96 hours. The average response nication channels have been discussed speed of all corporate notifications within during the quality evaluation process. The KKB was 263 minutes. Meanwhile, KKB’s Training and Quality Management team service level of responding to member was established to develop the service notifications is 95%. The service level of calibration. Regular and situational trai- incoming calls is 98%.

HIGHLIGHTS

↗↗ During the year, the number of ↗↗ The average response speed of all notifications increased 10% compared corporate notifications within to 2016, while the number of phone calls KKB was 263 minutes reached 40 thousand.

58 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 THE CUSTOMER As part of quality review efforts, 12% of At the Risk Center’s Customer Communi- COMMUNICATION CENTER e-mails sent by MMC were reviewed. The cation Center, a total of 150 thousand cal- evaluation results were shared in order to ls and 5 thousand e-mails were respon- EMBRACES A CUSTOMER contribute to the development of those ded to with a 95% service level. FOCUSED SERVICE who responded to the notification. Ques- tions and requests of members continu- At the same time, in order to boost cus- UNDERSTANDING AND ed to be responded to in a shorter period. tomer satisfaction, 1,400 notifications HIGH-QUALITY STANDARDS. This result is due to the fact that 80% of were responded to via social media in THANKS TO THIS APPROACH, all the notifications coming to KKB were 2017. With a 48% satisfaction ratio in the responded by the first level MCC. complaint management channels, CCC CCC MAINTAINED THE achieved the highest satisfaction ratio in HIGHEST SERVICE LEVEL IN Customer Communication Center (CCC) the finance sector. * In 2017, CCC continued to provide the best THE SECTOR AT 88.3%. THE possible service to Findeks customers. A classroom training with 240 person/day NUMBER OF INCOMING CALLS rate was conducted to ensure develop- JUMPED 64% COMPARED TO The Customer Communication Center ment of employee competencies. E-lear- embraces a customer focused service ning tools were developed as a comple- 2016, TO 375 THOUSAND. understanding and high-quality standar- ment to training activities, with all teams ds. Thanks to this approach, CCC maintai- ensured to benefit from this practice. ned the highest service level in the sector at 88.3%. The number of incoming calls * (Source: ŞikayetVar.com Comparative Sector jumped 64% compared to 2016, to 375 Reports) thousand.

The number of Findeks Rating Consultan- cy appointments went up 14% to 23,500, compared to 20,700 in 2016. Meanwhile, Findeks package sales posted a 192% rise in turnover in 2017. Steadily increasing its share in Findeks sales channels, CCC realized about 60% of its TRY 2 million in annual sales turnover by turning incoming calls into sales opportunities.

Steadily increasing its share in Findeks sales channels, CCC realized about 60% of its TRY 2 million in annual sales turnover by turning incoming calls into sales opportunities.

BUSINESS UNITS 59 12. BUSINESS UNITS

THE LEGAL COMPLIANCE UNIT LEGAL COMPLIANCE AND OPERA- ship access forms submitted by members after controlling them in compliance with the memo- AIMS TO HARMONIZE THE TIONS DEPARTMENT randum; meeting customer report requests rela- PRODUCTS AND SERVICES ted to the RC Risk Report, while ensuring that the The Legal Compliance and Operations Depart- data types, which are notified to the members- OFFERED BY KKB WITH ment was formed in October 2017 through the hip on a daily basis, are logged on the system. merger of the Legal Compliance Unit (struc- EXISTING OR PROSPECTIVE tured under the Internal Control Department) In addition to its core activities in 2017, the Aut- LEGISLATION. THE UNIT with the Operations Center (structured under horization Management Team assumed respon- the Sales and Operations Department). ENSURES THAT NEW sibility and managed process compliance for authorizing and password sharing of services PRODUCTS OR SERVICES Legal Compliance Unit opened to member institutions that make web The Legal Compliance Unit aims to harmoni- PLANNED TO BE OFFERED service calls via API Gateway, acting on custo- ze the products and services offered by KKB mer confidentiality decisions, and processing of ARE IN COMPLIANCE WITH with existing or prospective legislation. The entities with cheque ban. Unit ensures that new products or services APPLICABLE LAWS AND planned to be offered are in compliance with The Official Correspondence Team’s activities REGULATIONS. applicable laws and regulations. In 2017, the include responding to correspondence from Unit’s main agenda items included complying customers as well as official institutions such as with the amendment to the Law on Protection the court, prosecutor’s office, police headquar- of Personal Data, and the amendment made ters, Ministry of Finance, Capital Markets Board to the Cheque Law and the Turkish Commer- (CMB), Social Security Institution (SSI) and the cial Code relating to the QR Code Cheque. Ot- Directorate of Execution within the legally requ- her items on the Unit’s agenda were ensuring ired time frame. The team also ensures that the compatibility with the Law on Protection of reports requested by the official institutions are Consumers and drafting legislation regarding produced accurately and completely and beco- the transfer of the cheque to the digital en- me ready for submission. vironment. Largely due to the withdrawal of the decision to Operations Center Unit be made regarding the ban on writing a cheque The Operations Center Unit ensures the conti- and opening up a cheque account from the Cent- nuity and functioning of business processes ral Bank, requests from the official institutions at KKB. To this end, the Unit responds to the increased 400% in 2017. Meanwhile, authoriza- requests of members, customers and the tion transactions rose 100% from the prior year. units within the organization by proxy, both on behalf of KKB and the Risk Center of Banks In 2018, the Operations Center plans to conti- Association of Turkey. The Unit operates with nue responding to requests originating from all two teams: Authorization Management and channels quickly, accurately and completely; Official Correspondence. removing manual steps from the processes by trying to use all possibilities of technology; exe- The Authorization Management Team’s activi- cuting the processes in a fully integrated and ties include authorizing internal and external automatic manner; and further reducing opera- web applications of KKB; defining members- tional risks. hips and subscriptions; processing member-

HIGHLIGHTS

↗↗ Requests from the official institutions ↗↗ The Operations Center plans to increased 400% in 2017. Meanwhile, continue responding to requests authorization transactions rose 100% from originating from all channels quickly, the prior year. accurately and completely.

60 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

BUSINESS PROCESSES INTERNAL CONTROL DEPARTMENT Business Processes and Financial AND FINANCIAL CONTROL Control Unit The Exhaustive Audit Trail Infrastructure Business Processes and Financial Control EXECUTES CONTROL Project is designed to bolster KKB’s audit executes control activities related to all ACTIVITIES RELATED TO ALL trail structure with open source softwa- business and financial processes other re and big data platforms in line with its than the information systems processes BUSINESS AND FINANCIAL growing product range, expanding num- within the scope of applicable legislation PROCESSES OTHER THAN ber of customers and continuously prog- and KKB procedures. Breaches and viola- ressing technology. This effort was laun- tions detected as a result of the control THE INFORMATION SYSTEMS ched in 2017 under the ownership of the activities are managed by creating an ac- PROCESSES WITHIN THE Internal Control Department. Scheduled tion plan on the application (GRC) in use. SCOPE OF APPLICABLE to continue apace in 2018, the project will form smart sampling in monitoring the LEGISLATION AND KKB internal control system via third-party PROCEDURES. applications and analytical models. It will also put operational inquiry screens in use that will enhance efficiency and effectiveness in customer communication efforts.

Information Systems Control Unit Information Systems Control executes control activities in regards to the information systems processes within KKB pursuant to existing legislation and KKB internal procedures. The identified violations are recorded on the GRC application; relevant action plans are regularly monitored. Additionally, verification studies are conducted within the institution in relation to the obligations of the ISO 22301 and ISO 27001 certifications.

Information Systems Control executes control activities in regards to the information systems processes within KKB pursuant to existing legislation and KKB internal procedures.

BUSINESS UNITS 61 12. BUSINESS UNITS

VARIOUS COMPLIANCE LEGAL CONSULTANCY DEPART- ›› Communicated with regulatory authori- AUDITS WERE PERFORMED MENT ties on legal matters that require further explanation or comments; and ob- BY THE CONTRACTED The Department is responsible for kee- tained opinions from relevant agencies INDEPENDENT AUDIT ping up-to-date with current laws and as necessary. regulations affecting KKB. It is involved in ›› Provided legal support to General As- FIRM PURSUANT TO THE all legal processes pertaining to produ- sembly and Board of Directors’ meetin- RELEVANT PROVISIONS OF cts, projects, suppliers and procurement gs. THE RISK CENTER SERVICE of services to ensure that all these acti- ›› Evaluated and responded to compla- vities comply with applicable laws, rules ints from members and customers from AGREEMENT BETWEEN KKB and regulations. a legal perspective. AND TBB. RESULTS OF THE ›› Followed up patent and trademark app- In 2017, the Legal Department carried out lications for KKB’s brands; coordinated AUDITS WERE SUBMITTED TO the following activities: contracted patent offices. THE MANAGEMENT OF THE ›› Performed a legal assessment of pro- ›› Performed legal assessment of internal TBB RISK CENTER. cesses pertaining to products, projects processes. and collaborations. ›› Evaluated and issued legal notices and ›› Reviewed and prepared product, proje- warnings. ct and collaboration agreements; provided support for the review. Besides, the Legal Consultancy Depart- ›› Conducted a legal assessment of supp- ment also provides legal opinion and ad- lier services; prepared and reviewed vice on other matters and topics, as requ- agreements. ired by KKB. ›› Prepared legal documents for business units and provided legal advisory. Audits Conducted, Sanctions and Penal- ›› Prepared internal directives; issued ties Imposed During the Period signature circulars; and registered The independent audit activities for pre- company names. paration of the financial statements in ›› Followed up lawsuits, litigation cases, accordance with Turkish Accounting and investigations involving KKB; atten- Standards were carried out on a quarterly ded trials; and participated in discovery basis in 2017. Various compliance audits processes. were performed by the contracted inde- ›› Coordinated the relationship between pendent audit firm pursuant to the rele- KKB and law firms; provided guidance vant provisions of the Risk Center Service and follow-up to legal advisory firms on Agreement between KKB and TBB. Results pending cases. of the audits were submitted to the management of the TBB Risk Center.

HIGHLIGHTS

↗↗ The independent audit activities for ↗↗ Legal Consultancy Department preparation of the financial statements prepares internal directives; issued in accordance with Turkish Accounting signature circulars; and registered Standards were carried out on a quarterly company names. basis in 2017.

62 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

THE LEGAL CONSULTANCY Lawsuits Competitions Status of the Executives of DEPARTMENT CONDUCTED ›› On November 28, 2013, an action for the Company recovery of damages in the amount of The members of the Board of Directors A LEGAL ASSESSMENT TRY 200,000 in total, consisting of TRY of KKB did not engage in any business or OF SUPPLIER SERVICES; 50,000 as pecuniary damages and TRY transactions that violate the non-compe- 50,000 as non-pecuniary damages for tition agreement, neither for themselves PREPARED AND REVIEWED each plaintiff, was filed against KKB nor on behalf of others. AGREEMENTS IN 2017. with the allegation of unfair competition and with the two plaintiffs claiming at Remuneration of the Members of the Bo- least 20% of the earnings as compen- ard of Directors and Senior Managers sation. The lawsuit is currently pending. KKB pays TRY 11,550,000 to Board mem- ›› In the currently pending lawsuit, bers and senior management. non-pecuniary damages in the amount of TRY 2,000 is claimed from XXX bank, Dividend Distribution Proposal including interest accrued since July During the Board of Directors meeting da- 23, 2008, along with the correction of ted February 28, 2017 and in line with the KKB records. decision numbered 2018/09, it was una- ›› The lawsuit filed against XX Bank and nimously resolved by the participating KKB with a claim of TRY 1,000 for materi- members to submit for the approval of the al compensation and TRY 30,000 for im- General Assembly: i) not to distribute the material compensation due to the redu- income remaining from the Company’s ction of the credit rating on 27.10.2016, 2017 Gross Profit after setting aside the continues. legal reserves, to the shareholders; and ›› There are two ongoing reemployment to keep it in the Extraordinary Reserves lawsuits. Account, ii) to distribute, the remaining net amount after setting aside legal reserves from the TRY 15,000,000.00 of 2013 income, recorded in the Extraordinary Re- serves Account and which was not previously distributed.

The Legal Consultancy Department provides legal opinion and advice on other matters and topics, as required by KKB.

BUSINESS UNITS 63 12. BUSINESS UNITS

THE CRISIS MANAGEMENT COMMITTEES DEPARTMENT Information Security Committee COMMITTEE CONVENES The Information Security Committee aims Audit Committee to assess KKB’s information security weak- TO DETERMINE CRISIS The Audit Committee convenes to review the nesses, primarily the changes to the ope- SCENARIOS, PREPARE activities of the Internal Audit, Legal Comp- rations of the information security function, liance and Operations, Internal Control, Risk as well as the evaluation of the need for re- RELEVANT ACTION PLANS, Management Departments. The Committee source and coordination to eliminate these REVIEW CHANGES IN aims to share the results of these activities weaknesses. The Committee’s responsibili- THE OPERATIONS OF THE with KKB senior management. Information ties include informing senior management on the results of audit activities conducted about information security violations within BUSINESS CONTINUITY within the organization is provided to the the organization and global information se- FUNCTION AND EVALUATE participants, which include some members curity incidents. of the Board of Directors. RESOURCE NEEDS, ON THE Crisis Management Committee BASIS OF THE MENTIONED Disciplinary Committee The Crisis Management Committee conve- SCENARIOS. The Disciplinary Committee is responsible nes to determine crisis scenarios, prepare for determining situations contrary to the relevant action plans, review changes in the Human Resources Discipline Regulation and operations of the business continuity fun- for implementing the disciplinary sanction ction and evaluate resource needs, on the decisions that are deemed appropriate. To basis of the mentioned scenarios. The Crisis determine situations contrary to the Discip- Management Committee is responsible for linary Regulations, the Legal Consultancy providing information on the current status Department and KKB Department Executi- of business continuity risks, actions and ves participate. During the proceeding, the practices. parties aim to evaluate the results of the inquiry on the related issue. IT Steering Committee The IT Steering Committee is responsible KKB Steering Committee for ensuring alignment of IT strategies with The KKB Steering Committee is responsib- business objectives; prioritizing resource le for the current status of the institution’s requirements in this direction; developing finances, assessment of the compatibility strategies; monitoring and improving the with the strategic objectives, and evaluati- developed strategies. The Committee also on of the new products/services planned. prepares the annual IT budget and submits In addition, the Committee evaluates s in- it for approval, plans IT investments and formation from the related Department Exe- assesses the impact of new investments cutives about the activities realized within on the KKB risk profile and resource requi- the month that are strategically important. rements.

HIGHLIGHTS

↗↗ The Disciplinary Committee is responsible ↗↗ The IT Steering Committee is charged for implementing appropriate disciplinary with ensuring alignment of IT sanctions. strategies with business objectives.

64 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 12. BUSINESS UNITS

THE DATA GOVERNANCE Project Steering Committee Process Committee COMMITTEE IS RESPONSIBLE The Project Steering Committee is respon- The Process Committee convenes to as- sible for informing senior management sess changes to be made in the functioning FOR MAKING DECISIONS TO about the strategic conformity of projects, of the institutional processes. The Commit- ENSURE THE QUALITY AND requests to be added to the annual project tee is also responsible for eliminating gray plan (Master Plan), assessing the costs and areas as to which units should undertake INTEGRITY OF THE DATA priorities of projects, evaluating the risks re- the process activities; determining and mo- THAT THE ORGANIZATION lated to potential and existing projects. nitoring the performance goals of the pro- HAS PROVIDED, STORED AND cesses. In addition, the Process Committee Data Governance Committee coordinates all optimization and automa- SHARED AND ASSESSING The Data Governance Committee is respon- tion efforts of the processes in terms of THE COMPATIBILITY OF sible for making decisions to ensure the design and operation with senior manage- quality and integrity of the data that the or- ment support. PROJECTS THAT AFFECT ganization has provided, stored and shared. THE INFORMATION The Committee also decides on the type of ARCHITECTURE. data and sharing methods to be used within the scope of the product/service provided by KKB, identifies the needs related to the data, and assesses data validation rules and methods. In addition, the Data Gover- nance Committee evaluates the information architecture and makes decisions on the compatibility of projects that affect the information architecture.

The Process Committee convenes to assess changes to be made in the functioning of the institutional processes. The Committee is also responsible for eliminating gray areas as to which units should undertake the process activities.

BUSINESS UNITS 65

ACTIVITIES 13. OUR HOLISTIC PRODUCTS AND SERVICES

Service Name 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Credit Reference System (CRS) Individual Customer Objection Assessment System (Individual MIDES) False Information/Document/Declaration/Application Alert System (SABAS) CRS Information Verification System Personal Credit Rating (PCR) Corporate Bureau System (CBS) Limit Control System (LCS) Internet Fraud Alert System (IFAS) Bounced Cheque Inquiry and Sharing Services Individual Indebtedness Index Check Report Risk Report GeoMIS – Map Based Reporting Service Agricultural Loan Assessment System (TARDES) Check Index Central Decision Support Systems (CDSS) Commercial Credit Rating (CCR) Prescribed Accounts Credit Limit Credit Risk Inquiry and Sharing Services Protested Bills Sharing Service Individual Cheque Inquiry Risk Center Customer Report Service Address Processing Cheque Status Inquiry Farmer Registration System Rating Consulting Warning Service Tracer Trade Registry Sharing System (TRSS) Corporate Customer Objection Assessment System (Corporate MIDES) Cheque Report Raw Data Presentation Risk Report Raw Data Presentation Bounced Cheque Alert Service Inquiry and Warning Services (re: entities banned from tenders) Derivative Transactions Sharing Service Information Update Applications Service Data Validation and Sanction Applications Service Acceptance – Rejection Notifications Related to Loan Applications Sharing of Internal Rating Scores OI and Rating Scores Sharing Service Official Institution and Customer Information Request Services Member Request Management Services QR Code Cheque System Letter of Guarantee Status Inquiry (LGSI) Collection Scores Inclination Scores Central Invoice Registration System (CIRS) IBAN Verification Service LCS Customer Objection Assessment System (MIDES) National Fraud Attempt Detection and Prevention Service Credits Analysis Portal Risk Center Bulletin and Statistics Publications Services Paid Bills Inquiry Sharing Information about Cheques Granted Interim Injunction Sharing Service about Companies that Declared Bankruptcy/Suspended Bankruptcy/Declared Concordat Sharing Service about Customers Banned from Using Cheques Customer RA Personal Record Search Cross-Cheque Relations Inquiry Service Credit Insurance Inquiry Service MERSIS INQUIRY SERVICE RC Warning Services Cheque Analysis Portal KKB Unknown Number Service KKB Maps Service BKM Member Merchant Turnover Information Inquiry Loan Utilization Instant Sharing Service (KAPS) Force Majeure Inquiry Individual Inquiry Reports

68 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 Service Name 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Credit Reference System (CRS) Individual Customer Objection Assessment System (Individual MIDES) False Information/Document/Declaration/Application Alert System (SABAS) CRS Information Verification System Personal Credit Rating (PCR) Corporate Bureau System (CBS) Limit Control System (LCS) Internet Fraud Alert System (IFAS) Bounced Cheque Inquiry and Sharing Services Individual Indebtedness Index Check Report Risk Report GeoMIS – Map Based Reporting Service Agricultural Loan Assessment System (TARDES) Check Index Central Decision Support Systems (CDSS) Commercial Credit Rating (CCR) Prescribed Accounts Credit Limit Credit Risk Inquiry and Sharing Services Protested Bills Sharing Service Individual Cheque Inquiry Risk Center Customer Report Service Address Processing Cheque Status Inquiry Farmer Registration System Rating Consulting Warning Service Tracer Trade Registry Sharing System (TRSS) Corporate Customer Objection Assessment System (Corporate MIDES) Cheque Report Raw Data Presentation Risk Report Raw Data Presentation Bounced Cheque Alert Service Inquiry and Warning Services (re: entities banned from tenders) Derivative Transactions Sharing Service Information Update Applications Service Data Validation and Sanction Applications Service Acceptance – Rejection Notifications Related to Loan Applications Sharing of Internal Rating Scores OI and Rating Scores Sharing Service Official Institution and Customer Information Request Services Member Request Management Services QR Code Cheque System Letter of Guarantee Status Inquiry (LGSI) Collection Scores Inclination Scores Central Invoice Registration System (CIRS) IBAN Verification Service LCS Customer Objection Assessment System (MIDES) National Fraud Attempt Detection and Prevention Service Credits Analysis Portal Risk Center Bulletin and Statistics Publications Services Paid Bills Inquiry Sharing Information about Cheques Granted Interim Injunction Sharing Service about Companies that Declared Bankruptcy/Suspended Bankruptcy/Declared Concordat Sharing Service about Customers Banned from Using Cheques Customer RA Personal Record Search Cross-Cheque Relations Inquiry Service Credit Insurance Inquiry Service MERSIS INQUIRY SERVICE RC Warning Services Cheque Analysis Portal KKB Unknown Number Service KKB Maps Service BKM Member Merchant Turnover Information Inquiry Loan Utilization Instant Sharing Service (KAPS) Force Majeure Inquiry Individual Inquiry Reports

ACTIVITIES 69 14. KKB’S PRODUCTS AND SERVICES*

Service Name 2010 2011 2012 2013 2014 2015 2016 2017 Limit Control System (LCS) Personal Credit Rating (PCR) False Information/Document/Declaration/Application Alert System (SABAS) Internet Fraud Alert System (IFAS) Individual Indebtedness Index Cheque Report Risk Report GeoMIS – Map Based Reporting Service Agricultural Loan Assessment System (TARDES) Cheque Index Central Decision Support Systems (CDSS) Commercial Credit Rating (CCR) Prescribed Accounts Address Processing Cheque Status Inquiry Farmer Registration System Rating Consulting Warning Service Tracer Trade Registry Sharing System (TRSS) QR Code Cheque System Letter of Guarantee Status Inquiry (LGSI) Collection Scores Inclination Scores Central Invoice Registration System (CIRS) IBAN Verification Service LCS Customer Objection Assessment System (MIDES) National Fraud Attempt Detection and Prevention Service Credits Analysis Portal Cheque Analysis Portal KKB Unknown Number Service KKB Maps Service Loan Utilization Instant Sharing Service (KAPS)

*Products and services offered to the TBB Risk Center by proxy are presented in Chapter 15.

70 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 THE PERSONAL CREDIT LIMIT CONTROL SYSTEM (LCS) ›› If the final limit is notified wrongly. RATING (PCR) IS A ›› If the current limit is notified wrongly. Pursuant to the Bank Cards and Credit NUMERICAL INDICATOR Cards Law, the total limit of credit cards As a result of the latest improvements to CALCULATED BY KKB FOR that may be granted by a card issuing or- LCS; Reduction and closure transactions, ganization to a customer, who will begin which are carried out in batch, can now INDIVIDUAL CUSTOMERS using a credit card for the first time, may be performed online. Allocation and addi- TO PREDICT AND COMPARE not exceed twice their income for the first tional allocation transactions can be can- year and four times thereof for the second celled online. CUSTOMERS’ ABILITY TO year. Pursuant to the regulation dated Oc- REPAY THE LOANS THEY tober 8, 2013, credit limits apply to all cre- With the launch of the LCS Urgent Upda- HAVE OBTAINED OR WILL dit card holders. ting service, members became able to perform reduction, closure and record OBTAIN FROM KKB-MEMBER KKB began work on this issue in collabo- correction transactions without docu- INSTITUTIONS. ration with the TBB Credit Cards Working ment circulation in order to facilitate cor- Group, commencing the test run of the rection of limits notified to the LCS. Limit Control System (LCS) in late 2013. As of January 2014, all members uploa- PERSONAL CREDIT RATING (PCR) ded customers’ credit card data into the system. The Personal Credit Rating (PCR) is a numerical indicator calculated by KKB for Designed and developed by KKB in line individual customers to predict and com- with the country’s needs, the Limit Control pare customers’ ability to repay the loans System runs in real-time. they have obtained or will obtain from KKB-member institutions. PCR is a deci- LCS enables credit card issuers to mana- sion support product developed using a ge the single limit application by combi- statistical model; it provides a summary ning credit card limits assigned by credit of data pertaining to loan repayments of card issuers for each customer. customers, obtained via the Credit Refe- rence System (CRS). Starting on March 1, 2014, sanctions are implemented within the Limit Control Sys- PCR enables lending institutions to make tem (LCS) under the following conditions: rational, standardized risk decisions while ›› If there are missing records in the first shortening the decision-making process notification file transmitted, or if a sub- substantially. As a result, customers can sequent addition is attempted, access loan products in a shorter time. ›› If FTP notification does not comply with the standards or is not made within the KKB launched the fifth version of PCR in specified time. 2017.

HIGHLIGHTS

↗↗ KKB launched the fifth version of ↗↗ As of January 2014, all members uploaded PCR in 2017. customers’ credit card data into the system.

ACTIVITIES 71 14. KKB’S PRODUCTS AND SERVICES

THANKS TO THE FALSE INFORMATION/DOCUMENT/DEC- ›› Protecting KKB members from beco- INFORMATION SHARING LARATION/APPLICATION ALERT SYSTEM ming victims of crimes, which may (SABAS) have more destructive consequences TECHNIQUE AND PLATFORM, than that of the malicious attempts DEVELOPED BY KKB AND Serving the finance industry for the past described under SABAS. 10 years, the False Information/Docu- ›› Enabling KKB members to minimize the- SETTING SABAS APART FROM ment/Declaration/Application Alert Sys- ir risks, thanks to SABAS, while protec- OTHER SIMILAR SYSTEMS tem (SABAS) enables members to share ting natural persons and legal entities information about malicious attempts to from becoming victims of such attemp- USED AROUND THE WORLD, use wrongful information and related risk ts. MEMBERS ARE ABLE TO factors under a defined scheme and to SHARE FACTS, FINDINGS take necessary measures. INTERNET FRAUDS ALERT SYSTEM (IFAS) AND EVIDENCE RELATED TO Thanks to the information sharing tech- Scammers can obtain customers’ onli- CRIMES SUCH AS FORGERY, nique and platform, developed by KKB ne banking usernames and passwords and setting SABAS apart from other si- and use this information to transfer mo- FRAUDULENCE, IDENTITY milar systems used around the world, ney to their own accounts, which they THEFT, MONEY LAUNDERING, members are able to share facts, findings usually open using counterfeit identity AND THE LIKE. and evidence related to crimes such as documents. This crime has become very forgery, fraudulence, identity theft, money common of late. Even though banks use laundering, and the like. highly advanced security systems to prevent such attempts, criminals continue to SABAS is structured around five main ob- develop new methods to bypass these jectives: systems. ›› Protecting citizens and customers from risks and victimization by preventing Developed by KKB, the Internet Frau- use of their information, documents, ds Alert System (IFAS) primarily aims to possessions and property by others enable communication between member (e.g. identity thieves, money launde- corporations regarding Internet frauds. rers, impostors, swindlers, and the like). To that end, requests to block an account ›› Informing KKB members about actual in the case of money transfer scams can or potential risks arising from malicious be transmitted via IFAS. This way, a more attempts in order to protect them aga- effective communication can be establis- inst such risks or reduce their loss or hed between corporations and all kinds of damage. information regarding transactions can be ›› Enabling KKB members to exchange stored in the data processing system. information under standards and rules that are free of personal comments, opinions or judgment.

Designed and developed by KKB in line with the country’s needs, the Limit Control System (LCS) runs in real-time.

72 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 THE PERSONAL Given that money transfers can beco- The objectives of PII include: INDEBTEDNESS INDEX me quite complex, an automatic graph- ›› Establishing an early warning system drawing feature was added to the system by identifying those persons who use (PII) IS A SCORE-BASED to facilitate the investigation of such inci- a new loan to pay off an existing debt RISK INDEX DEVELOPED BY dents. This feature is used to create a flow and who therefore are increasingly in- diagram for each money transfer scam. curring more debt, even though they KKB TO INTRODUCE A NEW may not have shown any signs of re- RISK PERCEPTION TO THE Another important feature of IFAS is that payment problems in the past. BANKING-FINANCE INDUSTRY it can be integrated and operated in pa- ›› Ensuring responsible lending. rallel with SABAS. Criminals generally use ›› Enabling users to make more accurate AND TO ENABLE BETTER counterfeit documents to withdraw the decisions concerning matters such as PREDICTION OF POTENTIAL stolen money. In online fraud, perpetrators determining credit limits, risk-based generally open deposit accounts using pricing, and the like. RISKS. false identification documents in order to ›› Improving the quality of the lending de- withdraw the money they have transfer- cision systems of banks. red from customers’ bank accounts. Data pertaining to such accounts are shared The Personal Indebtedness Index (PII) within SABAS so the relevant departments was developed to predict those persons of corporate members can access this who will become excessively indebted information. Hence, information used pre- within one year following the date of the viously for fraudulent purposes and dete- inquiry, even if they are not expected to cted by IFAS can never be used again. become insolvent within the same period.

PERSONAL INDEBTEDNESS INDEX (PII) In addition to the definition of “non-performing loan” (i.e. persons who failed to pay The Personal Indebtedness Index (PII) is a three installments in succession, persons score-based risk index developed by KKB who are under legal prosecution, persons to introduce a new risk perception to the who are classified as uncollectible ac- banking-finance industry and to enab- count), which Personal Credit Rating and le better prediction of potential risks. PII similar risk prediction models try to fore- aims to identify persons who are inclined cast, PII also detects signs of “excessive to run up excessive debts, even though indebtedness.” PII was developed to iden- they may not have shown any signs of re- tify persons who have an outstanding payment problems in the past. non-guaranteed debt higher than TRY 250 and to predict excessive indebtedness.

HIGHLIGHTS

↗↗ Risk prediction models try to forecast, ↗↗ Another important feature of IFAS is that it PII also detects signs of “excessive can be integrated and operated in parallel indebtedness.” with SABAS.

ACTIVITIES 73 WE PROTECT THE TRUST WE BUILD WITH OUR STRONG AUDIT SYSTEMS.

ALİ KEMAL CENK

74 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 14. KKB’S PRODUCTS AND SERVICES

THE RISK REPORT IS A KKB RISK REPORT gative information, such as overdue pay- PRODUCT THAT SHOWS ments or records under prosecution, but The Risk Report is a KKB product that also positive information, such as timely THE LOAN REPAYMENT shows the loan repayment performance repayment of loans. Therefore, the Risk PERFORMANCE OF NATURAL of natural persons and legal entities. Report offers a significant advantage for persons who pay off their debts by the PERSONS AND LEGAL The credit registry data owned by KKB due date. ENTITIES. consists of customer information shared between KKB’s members. The Risk Report, Since September 2012, KKB has also sha- which is based on this data without any red the Risk Reports with report-issuing modifications, contains the following in- persons/institutions and third parties formation: authorized by these issuers through bank ›› Findeks Credit Rating branches. In addition to the financial in- ›› Limits, risks, past payment performan- dustry, the Reports have been shared ele- ce and credit card payment details of ctronically via the Findeks platform with the respective individual individuals and the real sector since 2014. ›› Number of financial institutions which made the notification In 2014, KKB further enriched the content ›› Total number of credit accounts of the Risk Report and added the fol- ›› Total limit and balance data lowing information: ›› Date of the last loan utilization ›› Worst case in the repayment history ›› Number of overdue credit accounts ›› Longest overdue period to date ›› Total amount of overdue balance ›› Liabilities of credit card holders, outs- ›› Longest overdue period to date tanding balance under prosecution, ›› Details of any loan under prosecution credit utilization ratio, balance of outs- ›› Leasing – Factoring combined data tanding installments ›› Customer’s credit score percentile and ›› For consumer loans: outstanding ba- percentile rankings across Turkey lance under prosecution, credit utilization ratio, number of installments, The Risk Report also shows repayment amount of installments, and the like performance for each loan over the past 18 months, while providing an overview of With its new design and content, KKB’s repayment performance in the financial Risk Report surpasses other similar re- sector. The Report contains not only ne- ports published around the world.

AN EXEMPLARY INFRASTRUCTURE IMPLEMENTATION IN THE WORLD

ACTIVITIES 75 14. KKB’S PRODUCTS AND SERVICES

KKB HAS SET AN EXAMPLE CHEQUE REPORT ›› Number and amount of cheques boun- WORLDWIDE WITH ITS ced and still unpaid since 2009 The enactment of the Law Amending ›› Number and amount of cheques boun- UNIQUE INFRASTRUCTURE, Cheque Law No. 6273, which was promul- ced but subsequently paid since 2009 WHICH ENABLES THE gated in Official Gazette No. 28193 (Repe- ›› Date of first cheque presented ating) dated February 3, 2012, abolished ›› Date of first cheque presented and dis- REQUESTING OF CHEQUE the sanction imposed on issuers of boun- honored REPORTS BY OBTAINING ced cheques and ushered in a new era ›› Date of last cheque presented and dis- ONLINE CONSENT FROM in the Turkish economy in terms of credit honored risk management. ›› Date of last cheque paid upon presen- THIRD PARTIES. tation Platforms through which information ›› Number and amount of cheques paid required for proper management of risk during the last 1-, 3- and 12-month pe- and for accurate decision making by a riods cheque bearer whether to accept the ›› Number and amount of cheques disho- cheque aim to protect both the cheque nored during the last 1-, 3- and 12-month issuer and bearer. periods ›› List of dishonored cheques, limited to The Cheque Report Presentation System the most recent 50 cheques was introduced by KKB in April 2012 to ›› Number of open cheques remaining un- make the cheque more secure as a com- paid or non-dishonored mon instrument of payment. The system ›› Number and amount of postdated offers a service that provides the cheque cheques remaining unpaid or non-dis- payment history information needed by honored cheque bearers about the cheque issuers ›› Number of cheques unreturned to the in order to make sound decision via the banking system Cheque Reports the system produces. The Cheque Report enables tracking of Thanks to the system, the past cheque the cheque payment performance of an payment data of a cheque issuer is ac- account holder, whether positive or ne- cessible. The Cheque Report contains the gative. The report also shows how many following information: banks have issued cheque books to the ›› Banks where the customer has cheque account holder and gives an idea about accounts the credibility of the person in question. If ›› Number of cheques presented since the Cheque Report is used at the time of 2007 cheque acceptance, it is possible to pre- ›› Number and amount of cheques paid dict the probability of the cheque boun- upon presentation cing with up to 80% accuracy.

The Cheque Report enables tracking of the cheque payment performance of an account holder, whether positive or negative.

76 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 The Cheque Report is receivable via mo- KKB data and converts it into geographic The user of the application and the insti- bile devices or online. Reports can be coordinates. GeoMIS enables viewing of tution where they work are identified by required by real sector players from the all types of statistical data on the map by the IP address and the entire display is counter party at every platform of com- assigning different colors to different ca- based on that institution. mercial transaction. Through online re- tegories, which are broken down by city port applications, real sector players can and province. GeoMIS Personal obtain a Cheque Report or a Risk Report In July 2013, the members of the Credit of a debtor from said debtor or, with the- Comprised of various components, Geo- Reference System (CRS) started using the ir approval, directly from the KKB inquiry MIS does not only consist of a database, GeoMIS application, which had only been system to control their credit risk. KKB has numerical map and reports. GeoMIS can covering the inquiries done by CRS users set an example worldwide with its unique also be effectively used as a decision since the second half of 2009. infrastructure, which enables the reques- support system because it visualizes ting of Cheque Reports by obtaining onli- common database processes, such as In 2014, the data set of the GeoMIS appli- ne consent from third parties; moreover, inquiries and statistical analysis, combi- cation was further enriched with the addi- the system is integrated with all banks in ning them with geographic analyses pro- tion of personal loan portfolio data. Since Turkey. vided by the maps. Thanks to this capabi- that time, the application has also served lity, GeoMIS renders report outputs much as GeoMIS Personal. In 2013 and 2014, the following was ad- more valuable, providing output that bo- ded to enrich the content of the Cheque osts productivity and risk models. GeoMIS Corporate & Cheque Report; Cheque Index, Table showing the GeoMIS Corporate & Cheque is a product lowest, highest and average amounts of The following reports can be generated of the GeoMIS family. In August 2014, KKB cheques by year, Data of open cheques in through the GeoMIS Map-based Reporting expanded the data set of the GeoMIS fa- addition to collection guarantee cheques. System; Standard Report, which contains mily by adding specific information about portfolio data of an institution pertaining small/medium/large enterprises and the KKB began collecting information on post- to a specific period, Trend Report, which commercial segment. As a result, GeoMIS dated cheques and open cheques from enables the tracking of changes in port- Corporate & Cheque provides detailed re- its members. As a result, the Cheque folio data of an institution within a certain ports on the basis of cities and towns. Report now contains information about time period, Benchmark Report, in which issuers’ postdated and open cheques, in portfolio data of an institution can be eva- The GeoMIS Corporate application allows addition to bounced and paid cheques. luated against industry data, TÜİK (Turkish evaluation of limits, risks, Commercial Statistical Institute) data and a selected Credit Rating (CCR) and bad cheque data GEOMIS – MAP-BASED REPORTING SER- benchmarking group. pertaining to accounts contained in the VICE Corporate Bureau (CB) and display of this The GeoMIS service is provided by KKB th- data on the map on the basis of cities and GeoMIS, winner of the “Oracle 2014 Inno- rough the map-based reporting platform even towns. Corporate members are able vator Excellence Award,” is a location-ba- via the Oracle database and application to view their own data, track the chan- sed data reporting system that proces- servers. Data positioning on the map is ges and development of their data, and ses address information contained in done using geo-coding. to compare it with the industry and the competition.

HIGHLIGHTS

↗↗ Cheque Index, table showing the lowest, ↗↗ The GeoMIS service is provided by highest and average amounts of cheques by KKB through the map-based reporting year and data of open cheques in addition platform via the Oracle database and to collection guarantee cheques were added application servers. to enrich the content of the Cheque Report.

ACTIVITIES 77 14. KKB’S PRODUCTS AND SERVICES

TARDES PROVIDES AN Reports generated by the system contain TARDES provides an important platform IMPORTANT PLATFORM AND information about outstanding balances, and information service to financial ins- number of accounts, average score, cre- titutions, enabling them to make syste- INFORMATION SERVICE TO dit risk/bank branch, and the number of matic agricultural loan evaluations based FINANCIAL INSTITUTIONS, creditor firms/bank branches. on accurate, up-to-date data, without the need for specialist teams. ENABLING THEM TO MAKE As with other GeoMIS applications, the SYSTEMATIC AGRICULTURAL content of GeoMIS Corporate and Cheque TARDES offers KKB members the following LOAN EVALUATIONS BASED is continually improved. In its first year, benefits: GeoMIS Corporate’s data set was expan- ›› Reliable, up-to-date and detailed cost ON ACCURATE, UP-TO-DATE ded with the addition of information about tables created by expert staff; DATA, WITHOUT THE NEED cheques notified to KKB. ›› Simultaneous evaluation of different production and/or cultivation by the FOR SPECIALIST TEAMS. GeoMIS Combined same producer; The newest member of the GeoMIS produ- ›› The ability to extend loans with diffe- ct family, GeoMIS Combined includes and rent maturity dates depending on the maps information related to the credit li- types of production and agricultural mit/risk reported by banks and financial products; institutions as well as receivables to be ›› Evaluation of agricultural production liquidated by using the branch’s province by taking into account a producer’s and district address information. non-agricultural income and expenses; ›› Inclusion of personal information as The following information can be viewed well as production and income-expen- on GeoMIS Combined se data of other persons or entities that ›› The number of records, branches, cus- may impact loan repayment in a single tomers and customers per branch on application; Unit Reports; ›› The ability to offer a general credit limit ›› The risk amount in TRY terms, risk taking into account a producer’s agri- amount excluding rediscount and cultural and non-agricultural, commer- accrued interest, risk amount per cus- cial and personal activities and ability tomer, and risk amount per branch on to repay; Risk Reports; ›› Prevention of the extension of loans ›› Limits in TRY terms and limit occupancy that exceed a producer’s need and abi- rates on Limit Reports; lity to repay; ›› Non-performing receivable rates and ›› Evaluation of short-, medium- and long- delayed credit rates on Ratio Reports. term loans all-in-one; ›› Minimal IT and staff investment requi- AGRICULTURAL LOAN ASSESSMENT SYS- red by lending institutions; TEM (TARDES) ›› Automatic data input from the Farmer Registry System included; In 2013, KKB launched the Agricultural ›› A flexible lending infrastructure tailored Loan Assessment System (TARDES), whi- to financial institutions, enabling them ch contains a data sharing, system-ready to enter models and parameters into infrastructure for banks and financial ins- the system in line with their own credit titutions seeking to extend loans to the policies; agricultural industry.

78 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 ›› The capability to send notification ema- The Cheque Index, calculated statistical- Delivering this service centrally, KKB aims ils to users as the maturity date of a ly through an analysis of detailed data to provide institutions with quick, low- product, for which a limit has been pro- in the Cheque Report, facilitates interp- cost access to these systems. posed, approaches; retation of the reports and sound deci- ›› Time savings by blocking applications sion-making, hence ensuring time and KKB enhances any information sent by for products that do not qualify for a resource savings. The Cheque Index is a member when a decision is required, loan extension; based on statistical data obtained throu- processes it through CDSS, and then ›› Evaluation of a producer’s loan requ- gh the analysis of detailed information sends the final decision to that member. ests for non-agricultural purposes th- pertaining to cheque history. Therefore, This way, members can benefit from this rough the personal loan category. corporations can use the Cheque Index state-of-the-art technology, which was before engaging in a cheque transaction designed to reduce installation costs Thanks to the Agricultural Loan Assess- instead of attempting to interpret the de- and implementation time. Central Deci- ment System (TARDES), developed joint- tailed information in the Cheque Report. sion Support Systems (CDSS) are effe- ly by the Frankfurt School and KKB, and The Cheque Index enables companies to: ctively used by both the real sector and sponsored by the European Bank for Re- Have an idea about the reliability of the finance industry. CDSS can be used construction and Development (EBRD), cheques, which they accept as a gua- in a number of business areas, such as income and maturity calculations have rantee, Make consistent predictions as Application Management, Customer Ma- become much easier. to whether the cheque will be paid by the nagement, Limit Management, and Colle- maturity date, and Minimize any financial ction Management, where decisions must TARDES helps financial institutions save loss they may incur if the cheque boun- be constantly updated and optimized to time and manpower by providing informa- ces. adapt to the rapidly changing business tion compiled and evaluated by a profes- environment. CDSS features the following sional, impartial and expert team. It also CENTRAL DECISION SUPPORT SYSTEMS advantages: enables financial institutions to establish (CDSS) ›› Requires minimal IT resource since te- a standard, product-based evaluation chnical infrastructure is provided by system internally. As a result, TARDES sig- Serving as a data sharing platform since KKB. nificantly contributes to the development its founding, KKB now enables execution ›› Shortens integration processes to reali- of the agricultural industry. of the entire decision automation by me- ze projects, thanks to the advantage of ans of cloud technology via KKB through using an existing service. CHEQUE INDEX the Central Decision Support Systems ›› Reduces costs with per-transaction (CDSS), which began to be offered to the pricing. The Cheque Index summarizes cheque members in 2014. ›› Enables business units to make deci- using habits and the reliability of a sions independently of the IT Depart- cheque issuer while serving as a risk indi- CDSS is a decision automation system ment, thanks to the new generation cator in graphic form. The Cheque Index is used by institutions that delivers every Strategy Design Studio. based on a score for the market, which is type of decision – including application ›› Compiles and consolidates KKB data derived from the cheque payment data of management, risk/collection, credit moni- used in CDSS processes, which use natural and legal persons. toring, early warning services and the like KKB’s know-how and technology. – related to the services provided by them ›› Conducts inquiries on all reports recei- The Cheque Index evaluates the cheque to their customers, in a fast, efficient and ved from KKB through inquiry. payment behavior of legal entities and standardized manner. The most impor- natural persons as a measurable factor. tant downside to these systems, despite If there has been a problem, the Cheque their many advantages, is that purchase, Index’s calculation reflects the number installation and operational costs can be and amount. The cheque bearer can ea- significant. sily see the standing of a cheque issuer on a simple diagram and compare his/her position with other cheque issuers.

ACTIVITIES 79 14. KKB’S PRODUCTS AND SERVICES

CCR IS BASED ON COMMERCIAL CREDIT RATING (CCR) KKB offers its corporate members two dif- DEMOGRAPHIC DATA, LOAN ferent Commercial Credit Rating models, The Commercial Credit Rating (CCR) is an derived from data modeling carried out AND COLLATERAL DATA, evaluation of the creditworthiness of a on the Corporate Bureau System. AND CHEQUE PAYMENT firm in order to facilitate commercial credit analysis. CCR is notified to member PRESCRIBED ACCOUNTS PERFORMANCE TO banks and other financial institutions as PREDICT TO WHAT EXTENT part of inquiries made through the Corpo- With this service, information about rate Bureau, which keeps record of credit prescribed deposit accounts, loan parti- AN ENTERPRISE WILL histories. cipation funds, trust and accounts rece- FULFILL THE REPAYMENT ivables are collected from banks that are REQUIREMENTS OF A LOAN CCR is based on demographic data, loan members of the Banks Association of Tur- and collateral data, and cheque payment key (TBB) and Participation Banks Associ- OBTAINED FROM A MEMBER. performance to predict to what extent an ation of Turkey (TKBB); consolidated; and enterprise will fulfill the repayment requi- published on a common platform (i.e. the rements of a loan obtained from a mem- website) for easy access by customers. ber. CCR measures a firm’s default probability within 12 months following the date Prescribed Accounts information is pub- of inquiry; therefore, if the CCR is high, lished every year in early February and then it means that default probability is can be accessed by financial services low. customers until June.

As financial institutions take into consi- ADDRESS PROCESSING SERVICE deration a number of variables during the lending process, loan repayment history The address formatting infrastructure is an important variable. CCR fills an im- used in GeoMIS, the map-based reporting portant gap by providing the information system launched in 2013, started to be needed to evaluate the loan repayment made available as a standalone service behavior of legal persons. As a result, in line with the needs of KKB members in monitoring the external behavior of loan 2014. customers becomes easier. This application contains a control to up- The Commercial Credit Rating (CCR) is date address information, such as street calculated statistically through analysis names, towns, and similar details by ge- of detailed data contained in the Risk Re- ocoding the customer address data with port. CCR provides the following advanta- the bank, adding the geocode data to the ges: address data, and accurately defining the ›› Risk decisions made by lending institu- newly added addresses into the system. tions can be evaluated more accurately. ›› A standard can be established in the The Address Processing Service provides commercial segment. the following benefits: ›› Decision-making processes are shorte- ›› Collective Processing of Customer Add- ned so that customers can access loan resses: Existing bank customer infor- products more quickly. mation can be formatted; changed information such as street name, district, and the like are updated and missing data completed; and geographic coordinates are added to the address data (geocoding).

80 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 ›› Sharing the Up-to-date Address Data- FRS is a combined system of systems, KKB member institutions and corporati- base with Members: In order to ensure used to keep records of personal infor- ons can use the LGSI service, which ma- accurate data entry of new addresses, mation and assets (e.g. agricultural land, inly targets public entities and instituti- Turkey’s address database is uploaded livestock, inputs, and the like) of farmers ons that accept a large number of letters into the member system and integrated actively engaged in agricultural activities, of guarantee, via web screens specially with the address entry screens. KKB along with product design and average designed for this application. Users can assigns coordinates to each address agricultural productivity. FRS enables the make online inquiries using banks’ upda- entered. KKB also provides a reverse implementation, monitoring and inspecti- ted letter of guarantee databases, which geocoding service, the process of back on of agricultural support programs; it is are integrated with the system. coding of a point location (i.e. latitude, also used for the development of agricul- longitude) to a readable address or pla- tural policies. LGSI covers all letters of guarantee issued ce name. to enterprises based in Turkey. In this on- ›› Mapping Service: Any specific data FRS Inquiry Screens enable those KKB line/real-time application, data flow from/ relating to a member can be mapped members who do not use the TARDES loan to the banks that issue letters of guaran- using a function run by KKB. module to inquire about FRS data, compi- tee is achieved through a web-based ser- led by the General Directorate of Agricul- vice integration. CHEQUE STATUS INQUIRY tural Reform and used to update, inspect, and monitor farmer related data. TRADE REGISTRY SHARING SYSTEM (TRSS) The Cheque Status Inquiry service was developed to prevent cheque fraud, LETTER OF GUARANTEE STATUS INQUIRY The Trade Registry Sharing System (TRSS) which has been on the rise of late. With (LGSI) enables financial institutions to access this service, one can find out whether a up-to-date trade registry information cheque is in circulation by making an on- The Letter of Guarantee Status Inquiry about their customers, and be promptly line inquiry about the status of accepted (LGSI) service enables customers who notified of any changes. cheques. The service makes it possible have received a letter of guarantee from to discover whether the cheque is in cir- a bank to check whether the letter of gu- Through TRSS, users can access amend- culation through an online inquiry via the arantee is still valid for the issuing bank. ments published in the Trade Registry Ga- issuing bank. The service allows for inquires using pa- zette on a daily basis using their preferred rameters such as bank name, branch method. The application allows for both With the Cheque Status Inquiry Service, name, row number, amount, currency and individual and multiple inquiries as well as the institution can inquire the bank code, expiration date. the use of proactive notification methods. branch code, checking account number and cheque row number of the cheques Institutions using the LGSI service save The Multiple Inquiry option enables users accepted as guarantee or for collection, time and cut operational costs by instant- to retrieve information about a number and the status of the cheques. ly inquiring about the validity of a letter of of customers at once. Users can either guarantee without the need to contact retrieve information about all types of an- FARMER REGISTRY SYSTEM (FRS) the issuing bank. nouncements or select announcements in a specific category. The Farmer Registry System (FRS) requi- Thanks to the system, which allows the res all farmers to be registered in a cent- validity of a letter of guarantee to be che- The Proactive Notification service sends ral database in order to monitor, inspect, cked instantly, fraud attempts can be pre- members daily notifications about selec- report and inquire about agricultural sup- vented as well. ted types of announcements concerning port, and to ensure evaluations are sound their customers in the Corporate Bureau and accurate. and newly established firms. The related notification file is sent to the FTP address.

Institutions using the Proactive Notifica- tion service are now able to determine the daily notifications they want to receive by entering specified criteria into the system.

ACTIVITIES 81 WE TAKE DIGITAL TRANSFORMATION TO OUR RISK MANAGEMENT PROCESSES.

SERDAR ÇOLAK

82 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 14. KKB’S PRODUCTS AND SERVICES

KKB’S INCLINATION SCORES COLLECTION SCORES ›› Saves time thanks to easy identificati- SEEK TO PREDICT LIKELIHOOD on of target masses on a product basis. Supporting the data-sharing service it ›› Accelerates sales through value added OF PERSONS TO USE A NEW offers to members with analytic scoring to sales and marketing operations. CREDIT PRODUCT IN THE models, KKB launched the Collection Sco- ›› Provides more productive, efficient ma- res service, one of its products. The Colle- nagement in making products availab- FUTURE BASED ON THEIR ction Scores service is used to calculate le. PAST BEHAVIOR AND THEIR the risk of further delaying payment or defaulting on a loan by a customer, who In 2015, KKB began calculating Inclination PERFORMANCE UNDER THE has already delayed repayment, in the Scores for personal loans by modeling CURRENT CREDIT PRODUCTS. near future. Collection Scores are risk loan and loan application data pertaining score cards tailored for each customer to the personal portfolio contained in the who delays their payment. With this tool, data warehouse using statistical metho- members can develop collection strate- ds. KKB plans to calculate Inclination Sco- gies for overdue customers and manage res for all personal products in the coming collection processes more effectively. Ta- period. king into account all CRS data, members can boost collection efficiency by plan- IBAN VALIDATION SERVICE ning their actions to realize risk segmentation according to the related overdue Fast, secure and accurate money trans- period. They can also ensure to prevent fer via financial institutions is becoming customer dissatisfaction except for ope- increasingly important for customers in rational gain. today’s fast paced business world.

INCLINATION SCORES KKB’s IBAN Validation Service enables customers to view masked data – such as KKB’s Inclination Scores seek to predict name/surname, company name – about likelihood of persons to use a new credit the real person or the legal entity that product in the future based on their past owns the IBAN, thus helping customers behavior and their performance under the avoid incorrect money transfers. current credit products.

KKB Inclination Scores: ›› Enables KKB members to reach the best prospects rapidly with appropriate strategies for product sales. ›› Allows members to see more comprehensive data via a single score with lesser operational burden. SOLUTIONS-ORIENTED PRODUCTS AND SERVICES

ACTIVITIES 83 14. KKB’S PRODUCTS AND SERVICES

LCS MIDES PROVIDES KKB’s IBAN Validation Service aims to: LCS MIDES was developed to respond to A PLATFORM FOR KKB ›› Prevent money transfer mistakes, customer objections in a quick and cle- ›› Cut operational costs, ar manner, and to carry out all related MEMBERS TO HANDLE ›› Reduce time costs, communications in accordance with the CUSTOMER COMPLAINTS ›› Provide customers with a secure tran- standards. It aims to shorten the objec- saction platform, and tion process and increase customer sa- RELATED TO INCOMPLETE OR ›› Increase customer satisfaction. tisfaction. INCORRECT INFORMATION SHARED VIA THE LIMIT LCS CUSTOMER OBJECTIONS HANDLING FRAUD ATTEMPT DETECTION AND PREVEN- SYSTEM (MIDES) TION SERVICE CONTROL SYSTEM. LCS MIDES provides a platform for KKB The objective is to create a national data- members to handle customer complaints base of loan application data provided by related to incomplete or incorrect infor- member institutions and offer protection mation shared via the Limit Control Sys- to the entire industry. tem. The Fraud Attempt Detection and Preven- If a customer thinks that the information tion service provides for a much safer shared via LCS is incomplete or incorrect, operational environment when compared they can initiate the objection process in to anti-fraud controls undertaken by each LCS MIDES by using the reference num- institution separately. This project aims to ber generated for the inquiry. Regarding minimize losses incurred by financial ins- complaints submitted by members, the titutions as a result of application fraud. process runs between objecting and responding parties through LCS MIDES The Fraud Attempt Detection and Preven- screens. If the responding member rep- tion service will run as a cloud-based lies to an objection with a value lower application via KKB; system participation than the LCS value, then the process con- will be easy and low-cost for financial ins- tinues via the LCS Urgent Updating screen titutions. Another great advantage is that with the responding member updating institutions will share the licensing ex- their reply. penses. The system is being designed to process both exclusive and shared rules and data.

The fraud attempt detection and preventıon service provides for a much safer operational environment when compared to anti-fraud controls undertaken by each institution separately.

84 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 THE COMPANIES WERE The new system will initially be activated Using different parameters and filtering PROVIDED THE OPPORTUNITY for lending institutions. Subsequently, it is options on the reporting screens, the Lo- expected to expand and become a natio- ans Analysis Portal can produce about TO RECEIVE DATA FROM THE nal information-sharing platform with the 175 million different reports on 2.5 billion PDP BASED ON PRODUCT AND participation of different industries. lines of data. Thanks to its state-of-the- art infrastructure, LAP generates these UNDER THE HEADING THEY LOANS ANALYSIS PORTAL (LAP) reports very fast. PREFER. The Loans Analysis Portal (LAP) is an inte- KKB’s corporate members who are also ractive reporting system that allows data Credit Reference System (CRS) users can reporting on the portfolio of any kind of perform the following analyses on LAP: installment loan, overdraft account and ›› Analysis of newly opened accounts credit card products owned by natural ›› Analysis of current portfolio, and persons; their payment performance; and ›› Risk analysis. comparison with the benchmarking group selected in the GeoMIS Individual applica- The Credits Portfolio Analysis system ge- tion and with the sector as a whole. LAP’s nerates reports using data derived from primary advantages to users include: the monthly notifications of CRS mem- ›› Showing the changes in an institution’s bers. The system contains data pertaining loan portfolio on a monthly basis and to the past 13 months and report results over time. are visually represented in diagrams. ›› Facilitating strategic decision-making by providing reports and information related to risk management, credit policies, marketing and campaign management, and collection practices. ›› Offering tailored data and content and ease-of-use via the Internet.

HIGHLIGHTS

↗↗ The Credits Portfolio Analysis system ↗↗ KAP (Public Disclosure Platform: generates reports using data derived “PDP”)’s reporting service was from the monthly notifications of CRS prepared as a separate portal for members. consumer finance companies.

ACTIVITIES 85 14. KKB’S PRODUCTS AND SERVICES

KKB UNKNOWN NUMBER With this application, an institution can: CHEQUE ANALYSIS PORTAL FACILITATES REACHING ›› Track the current state and development of its own loan portfolio; Cheque Analysis Portal is an interactive CUSTOMERS IN A SHORTER ›› Compare data related to different port- reporting environment that enables KKB PERIOD OF TIME WHEN THE folios, such as amount, volume, over- members to compare their cheque num- due payments and collections, with bers with the “comparison group” that CUSTOMERS DO NOT HAVE competitors; they will define, and the “sector in gene- A PHONE NUMBER, THE ›› Use all this data to establish and test ral.” its risk management policies. CORRECTNESS OF THEIR Through the reports prepared with the CONTACT INFORMATION IS IN KAP (Public Disclosure Platform: “PDP”)’s data obtained from the daily check noti- DOUBT, OR THEIR CONTACT reporting service was prepared as a se- fications of the Cheque Analysis Portal, parate portal for consumer finance com- they can: INFORMATION IS INCORRECT. panies. The companies were provided the ›› Compare the number of cheque custo- opportunity to receive data from the PDP mers using cheques for the first time based on product and under the heading with competitor institutions; they prefer. In addition to the newly ope- ›› Have information about the ratios and ned accounts analysis, current portfolio trends of customers who issue boun- analysis, and risk analysis reports that ced cheques in their customer portfo- they can already receive, consumer fi- lio; nance companies can prepare and use ›› Monitor the rates of the cheques who- reports in three main products: vehicle se backs are written and subsequently loans, mortgage loans and consumer lo- paid, on a monthly basis with the Vinta- ans. ge analysis; ›› Measure the ratio of bounced cheques during submission, and how loyal cheque customers are, to their payments; ›› Have information about the ratio of up- to-date bounced cheques and on how much of the bounced cheques have been paid; ›› Compare the ratio of cheque customers who issued a cheque for the first time, and who issued a bounced cheque for the first time, with the sector in general as well as with a peer group defined by the institution itself; ›› Reach cheque index distribution of the cheque customers.

With the Cheque Analysis Portal, customers can compare the number of cheque customers using cheques for the first time with competitor institutions.

86 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 THE LOAN UTILIZATION KKB UNKNOWN NUMBER LOAN UTILIZATION INSTANT SHARING SER- INSTANT SHARING SERVICE VICE (KAPS) KKB Unknown Number is an unknown num- (KAPS) IS DESIGNED TO ber service that facilitates reaching custo- The Loan Utilization Instant Sharing Servi- PREVENT THE OBTAINING mers in a shorter period of time, by enric- ce (KAPS) is designed to prevent the ob- hing the customer address of KKB, when the taining of loans by a person from banks OF LOANS BY A PERSON customers do not have a phone number, the and financial institutions in the same day FROM BANKS AND FINANCIAL correctness of their contact information is above his creditworthiness and to deter- in doubt, or their contact information is in- mine related fraud cases. INSTITUTIONS IN THE correct. SAME DAY ABOVE HIS The service allows the institution to know CREDITWORTHINESS AND TO The following is provided under the KKB Unk- if a customer has obtained any other lo- nown Number Service: ans within 48 hours at the time of utiliza- DETERMINE RELATED FRAUD ›› With Standard Inquiry, current and poten- tion of the loan. It enables prohibiting the CASES. tial customers can be reached using more person from receiving loans above their precise contact information via the na- solvency while preventing a type of fraud me-surname-address (province/district) commonly perpetrated in the market. information obtained through the inquiry conducted by using the phone numbers registered by the institution itself, It is also possible to communicate with customers who do not have contact information, or who cannot be reached on their registered numbers, via the numbers to be obtained via name-surname-address (province/district) information. ›› The Address Comparative Inquiry is designed to provide number information through name, surname and open address. This inquiry type allows coupling proximity of the inquired address to be measured by assigning a score to the phone number submitted as the answer, and to the address in the same inquiry where this number is registered. ›› The Verification Inquiry ensures that the current name, last name, phone number information held by the institution is con- firmed with the information registered in the directory service. An accuracy score is given to the open address information.

HIGHLIGHTS

↗↗ KKB Unknown Number is an unknown ↗↗ KAPS enables prohibiting the person from number service that facilitates reaching receiving loans above their solvency while customers in a shorter period of time, by preventing a type of fraud commonly enriching the customer address of KKB. perpetrated in the market.

ACTIVITIES 87 WE DEVELOP INNOVATIVE RISK MANAGEMENT SOLUTIONS WITH OUR EXPERIENCED AND EXPERT TEAMS. ORKUN DENIZ

88 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 15. OUR PRODUCTS PROVIDED TO TBB RISK CENTER

Service Name 2013 2014 2015 2016 2017 Credit Limit – Credit Risk Inquiry and Information Sharing Sharing Information about Protested Bills Bounced Cheque Inquiry and Information Sharing Individual Cheque Inquiry Risk Center Customer Report Service Credit Reference System (CRS) Corporate Bureau System (CBS) Personal Customer Objections Handling System (Personal MIDES) Corporate Customer Objections Handling System (Corporate MIDES) CRS Data Verification System Cheque Report Raw Data Presentation Risk Report Raw Data Presentation Bounced Cheque Warning System Inquiry and Warning about Entities Prohibited from Participation in Tenders Data Sharing About Derivative Transactions Data Updating Application Data Validation and Sanction Application Acceptance & Rejection Notifications Related To Loan Applications Sharing of Internal Rating Scores Credit Rating Agencies and Sharing of Rating Scores Government Agency Services and Customer Data Requests Member Requests Management Service Risk Center Bulletins and Statistics Publishing Services Paid Bills Inquiry Service Sharing Information about Cheques under Interim Injunction Sharing Information about Companies That Have Declared Bankruptcy/Suspended Bankrup- tcy/Debt Composition Sharing Information about Customers Prohibited from Using Cheques Customer RA Personal Record Search Service Cross Cheque Relations Inquiry Credit Insurance Inquiry Service MERSİS-CTMCRS Inquiry Service RC Warning Services Force Majeure Inquiry BKM Member Merchant Turnover Information Inquiry Individual Inquiry Reports EFFECTIVE SOLUTIONS THAT TAKE RISKS UNDER CONTROL

ACTIVITIES 89 15. OUR PRODUCTS PROVIDED TO TBB RISK CENTER

IN THE BOUNCED CHEQUE CREDIT LIMIT-CREDIT RISK INQUIRY AND SHARING INFORMATION ABOUT PROTESTED NOTIFICATION SERVICE, INFORMATION SHARING BILLS BANKS INFORM THE RISK Risk Center members submit and share Members notify the Risk Center about CENTER DAILY ABOUT information about credit limits extended bills disputed for non-payment and bil- to natural persons and legal entities and ls relieved from dispute once every 15 BOUNCED CHEQUES associated credit risk, in addition to ac- days. Personal information, address and PROCESSED AS WELL AS counts receivables to be liquidated, via amount stated on the bill are recorded in this system on a monthly basis. the system. Notifications sent by banks THEIR HOLDERS, PAID are consolidated and shared collectively CHEQUE AND ACCOUNT Information is collected from members with Risk Center members via the File OWNER WITHOUT ANY UPPER under the following categories: Transfer System. ›› Credit limit: Credit limit extended to real AND LOWER LIMIT. persons and legal entities for cash and BOUNCED CHEQUE INQUIRY AND INFORMA- non-cash loans, funds, and other ac- TION SHARING counts receivable activities. ›› Credit risk: Receivables arising from In the Bounced Cheque Warning System, cash and non-cash loans and funds information about cheques recorded as extended or mediated to natural per- dishonored by banks and their account sons and legal entities, other accounts holders, and information about cheques receivable activities, and associated paid after being recorded as dishonored interest and profit. and their account holders are notified to ›› Accounts receivables to be liquidated: the Risk Center on a daily basis, regard- Loans and other receivables classified less of the cheque amount. as “frozen” receivables by banks. Rece- ivables to be liquidated by leasing, fa- It is possible to run both individual and ctoring and financing companies, and multiple inquiries about bad cheques no- accounts classified as uncollectible. tified by members:

Information collected via this system is Collective Sharing: Bounced cheque data consolidated per account and shared submitted by members is consolidated with members that have sent notifica- and shared collectively with all members tions about these accounts. Individual of the Risk Center via the File Transfer inquiries are also possible via the web System. screen or the web service. Individual Sharing: Results of individual Through this system, the following infor- inquiries can also be shared with all mem- mation is also shared with the members: bers, whether they are customers or not, Information notified to the Risk Center by via the Risk Center’s web applications. TMSF (Savings Deposit Insurance Fund of Turkey) regarding credit limit, credit risk INDIVIDUAL CHEQUE INQUIRY and accounts receivables to be liquidated. Information about risks associated This service enables Risk Center mem- with commercial paper and principal debt bers to inquire about cheques recorded arising from bills issued through the Cent- as dishonored as well as cheques paid ral Registry Agency. after being recorded as dishonored.

The Credit Limit-Credit Risk-Receivables to be Liquidated (CLCR) system launched in 2013 to provide comprehensive information required by members to evaluate credit risk.

90 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 WITH THE CRS URGENT CREDIT REFERENCE SYSTEM (CRS) Members transmit the data of customer UPDATING APPLICATION, loan repayments in the prescribed details Credit Reference System is an informati- and format for the present and past on a MEMBERS ARE NOW on-sharing platform, through which deta- monthly basis to the CRS. KKB transfers the ENABLED TO PERFORM iled data about personal loan products is personal loan product data received from collected from the members of the Risk members in accordance with a standard PROCESSES SUCH AS Center and then shared with banks and fi- structure to the CRS database in its origi- UPDATING OF PERSONAL nancing companies. nal state without any modification, merger, addition or other alteration and opens the DETAILS IN ADDITION TO Banks and financing companies that are data to sharing with the other members. In THE FINANCIAL DATA OF members of the Risk Center can access: addition, the information contained in the LOAN ACCOUNTS, DELETION Data on all open accounts under which a risk reports comes from this data pool. consumer is “debtor” and “guarantor”; OF GUARANTORS AND Data on all closed accounts of the last five With the CRS Urgent Updating application, ADDITIONAL CARD USERS, years; Data on applications made during members are now enabled to perform pro- the last six months; and Loan repayment cesses such as updating of personal deta- DEREGISTRATION, AND THE performance data pertaining to the last 36 ils in addition to the financial data of loan LIKE WITHOUT WAITING months online within several seconds via accounts, deletion of guarantors and ad- FOR THE NEXT MONTH’S CRS inquiry. ditional card users, deregistration, and the like without waiting for the next month’s NOTIFICATION. With the ability to access any information notification. In 2015, daily notification to the regarding overall credit risk and repayment CRS will be enabled, so that the data sha- habits of any consumer by using CRS, fi- red will be much more up-to-date. nancial institutions can make any risk decision pertaining to their customers by rel- The Credit Reference System ensures mi- ying on concrete data. nimizing personal credit risk, boosting credit volume used by measuring credit risk, The CRS Collective Inquiry service allows making more rational, faster, and healthier users to make group inquiries on the port- credit and limit decisions. The system also folio of personal loan customers and to ma- encourages individual credit customers to nage risk effectively. As a result, financial pay on a regular basis and enables loan institutions can make their loan decisions utilization to be widespread. rapidly (e.g. extend loans by SMS) and offer their loan products rapidly to the right cus- CRS is not a black list; it also contains po- tomers under the right conditions. sitive loan repayment data. Consequently, customers have the opportunity to introdu- Thanks to this advantageous system provi- ce themselves easily to an institution with ded by KKB, the finance industry can grow which they will work for the first time ever. in a healthy manner and consumers are While the loan accounts are updated by the provided with the financial support they members on daily basis, application records require on macro scale. are created and opened to sharing instantly.

The Credit Reference System ensures minimizing personal credit risk, boosting credit volume used by measuring credit risk, making more rational, faster, and healthier credit and limit decisions.

ACTIVITIES 91 15. OUR PRODUCTS PROVIDED TO TBB RISK CENTER

AS OF OCTOBER After operating with the monthly data The content rich system facilitates sha- 2017, PERSONAL AND reporting and update system until June ring of an extensive range of data, inclu- 2015, CRS began to be updated daily as ding identity details of real persons and COMMUNICATIONS DATA, of that time. In CRS, where millions of ac- legal entities, information about relations WHICH IS ONLY REPORTED counts are recorded, credit information on a capital basis, loan account and re- and payment performance data were en- payment data, collateral information and DURING OPENING OF AN sured to be uploaded to the daily system. bounced cheque data. ACCOUNT, BEGAN TO BE With more current data, it became more likely for members to make healthier cre- As the number of members who provide RECEIVED ON A MONTHLY dit decisions more effectively. information to the system increases, the BASIS. THUS, THE DVS Corporate Bureau System is being used SYSTEM WAS GIVEN THE As of July 2016, CRS notification was initia- more intensively. CBS has become an im- ted by the asset management companies portant tool in the credit assessments of CAPABILITY TO BE FED WITH as well as banks and consumer financing KKB-member institutions regarding their UPDATED PERSONAL AND companies, enabling existing CRS data to corporate customers. As a result of a pro- be enriched. ject carried out to enrich the data of the COMMUNICATION DATA. corporate bureau in 2013, corporate inqui- As of October 2017, personal and com- ries now include the following: In addition munications data, which is only reported to the total corporate limit, information on during opening of an account, began to group limit, group risk, cash and non-cash be received on a monthly basis. Thus, the limit breakdown and general revision ma- DVS system was given the capability to turity are shared. be fed with updated personal and communication data. In 2014, a function was added to the CBS to enable institutions to perform any up- CORPORATE BUREAU SYSTEM (CBS) dating, deletion and correction on the Corporate Bureau Urgent Updating scre- The Corporate Bureau System (CBS) is an ens when there is any missing or errone- information sharing system which inclu- ous data transmitted to the CBS without des commercially qualified credit infor- waiting for the next notification month. mation of real and legal entity customers. Thanks to the system, where objections received and answered via MIDES are Launched in 2005, CBS offers a very rich listed, KKB members can make updates data set for use by members to perform without waiting for the next month’s no- a risk assessment on a legal entity. With tification. the Collective Inquiry function added to the system in November 2013, members can easily update the portfolio at certain periods.

The Corporate Bureau System (CBS) is an information sharing system which includes commercially qualified credit information of real and legal entity customers.

92 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 The first phase of the CBS Improvement MIDES has the distinction of being the In addition to dishonored and paid chequ- and Simplification initiative commenced fastest system in the world in terms of es, the Cheque Report also contains in 2017. This project enhanced data diver- examination of and responding to con- information about post-dated cheques sity within CBS and further improved the sumer complaints, when compared to and open cheques. As KKB began colle- system’s data uploading and inquiry per- similar systems. Although Risk Center cting information on Postdated Cheques formance. member banks are allowed a maximum of and Open Cheques from its members, the 24 hours to respond to objections made, Cheque Report now contains informati- Under this effort, KKB plans to enter Pay- the actual response time is less than two on about issuers’ postdated and open ment Performance data to CBS, just like in hours. cheques, in addition to dishonored and CRS, and share the Number of Days of the paid cheques. Biggest Delays in Payments within the In parallel to the start of CRS notifica- Period for any given loan, going back as tion by asset management companies The system now allows for the tracking of far as 36 months. In the other phases of in 2016, systematic developments were a person’s performance as a “bearer” in the project, the following financial institu- completed for the submission and evalu- the reports that are offered to members tions, which were not previously included ation of the objections against the asset for “inquiry” purposes. In addition to the- in the CBS, will be included in the system: management companies’ information. se reports, The Cheque Report Raw Data ›› Factoring Companies Presentation System presents informati- ›› Leasing Companies DATA VERIFICATION SYSTEM (DVS) on about cheques payable to the issuer at ›› Asset Management Companies 1-, 3-, and 12-month intervals; the number/ The Data Verification System (DVS) is a amount and ratio of cheques paid upon Banks and finance companies that do not KKB platform that allows members to presentation; the number/amount and currently send notifications started sen- check the accuracy of the information ratio of cheques that are dishonored but ding them after the launch of the project. declared by a consumer who applied to it; subsequently paid; the number/amount complete any missing information of exis- of cheques that are dishonored and still CUSTOMER OBJECTIONS HANDLING SYS- ting customers; and update any outdated unpaid. TEM (MIDES) data of the customers. DVS is used very intensively by KKB members. RISK REPORT RAW DATA PRESENTATION The Customer Objection Assessment Sys- tem (MIDES) allows automatic transmissi- Along with the start of CRS notification by Risk Report Raw Data Presentation provi- on of the objections related to the infor- asset management companies in 2016, des information about historical loan re- mation shared within the CRS and CBS to this information was used to feed the IVS payment performance of natural persons the member who registered the record. (Information Verification System). and legal entities.

Thanks to its construction, objections CHEQUE REPORT RAW DATA PRESENTATION Based on personal and commercial loan made by the customer: Through the Per- data that the Risk Center periodically col- sonal MIDES application in respect of the- This system provides access to the his- lects from corporate members via CRS ir data shared in the CRS, and Through the torical payment data of a cheque issuer. and CBS, this report contains the fol- Corporate MIDES application in respect of The report includes detailed information lowing information: Data such as limits, their data shared in the CBS Are handled about the banks where there is a cheque risks, number of credit accounts of real and concluded in a short period of time. account, cheques submitted, cheques and legal persons, as well as member in- If, as a result of the examination, the de- that bounced but subsequently paid, formation on who has account, their past termination is made that there is a prob- and details in regards to the dishonored credit payment performance, number of lem with the shared data, the necessary cheques paid in 1-month, 3-month, and 12 financial institutions that make notificati- correction is carried out without a request month intervals. on, delay and follow-up is included. within a short time. The limit and risk information that appe- ars in financial leasing and factoring companies are fed from the CLCR system and presented in the Risk Report.

ACTIVITIES 93 WE CONTINUE WORKING TO SUSTAIN THE INNOVATION CULTURE AT KKB. HAZAR TUNA

94 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 15. OUR PRODUCTS PROVIDED TO TBB RISK CENTER

THE CROSS CHEQUE CROSS CHEQUE RELATIONS INQUIRY INQUIRY AND WARNING ABOUT ENTITIES PRO- RELATIONS INQUIRY HIBITED FROM PARTICIPATION IN TENDERS This system allows inquiries about the mu- PRODUCES A LIST SHOWING tual cheque relations between the issuer Announcements published in the Official Ga- THE NUMBER AND AMOUNT and the last endorser who presented the zette related to entities prohibited from parti- cheque to a bank. cipation in tenders, an important input for the OF CHEQUES ISSUED risk assessments conducted by KKB members, MUTUALLY BETWEEN The Cross Cheque Relations Inquiry produ- are entered into the system on a daily basis. ces a list showing the number and amount COMPANIES AND NATURAL of cheques issued mutually between com- Based on this data, various services are pro- PERSONS, WITH DETAILED panies and natural persons, with detailed vided to KKB-member institutions, including: BREAKDOWN ANALYSES. breakdown analyses that include: “Cheque ›› When an announcement is published recorded as dishonored”; “Cheque paid af- about prohibited entities and natural per- ter being recorded as dishonored”; “Cheque sons, a warning report is produced speci- paid upon presentation”; and “Issuer’s post- ally for the financial institution that serves dated cheque”. these clients. As a result, members can be informed of notices published about their The Cross Cheque Relations Inquiry servi- customers without having to monitor the ce is provided via web applications since Official Gazette. November 2015, with all members actively ›› If a customer who is the subject of inquiry using it. in the Corporate Bureau has a tender ban record, then this information is also provi- BOUNCED CHEQUE WARNING SYSTEM ded at the time of the inquiry. ›› One can run a customer-based search via While the information about bounced the web application called Transactions cheques is uploaded into the system on a Related to Entities Prohibited From Ten- daily basis, the system scans the issuers of ders, and access all announcements pub- these cheques in both the Credit Referen- lished within the year. ce System (CRS) and the Corporate Bureau System (CBS) and produces a warning mes- DATA SHARING ABOUT DERIVATIVE TRANSAC- sage to inform members about the status of TIONS the bounced cheque. Under this service, KKB shares data about Consequently, KKB provides an early war- futures, options and similar derivative cont- ning service to its members by informing racts sold by banks to natural persons and them about any potential payment prob- legal entities one business day before the lems their customers may face in the future. notification date, including information about limits and risks on a semimonthly basis. Data sharing about derivative transactions can be made either collectively or individually. INNOVATIVE SOLUTIONS EFFECTIVE SERVICES

ACTIVITIES 95 15. OUR PRODUCTS PROVIDED TO TBB RISK CENTER

COURT DECISIONS RELATED ›› Collective Sharing: Data about deriva- The service of Sharing Cheques Imposed TO BANS ON ISSUING tive transactions is consolidated for under Interim Injunction enables clarif- each customer and shared collectively ying if there is any interim injunction or CHEQUES AND OPENING with members that have sent notifica- cancellation decision on a cheque. With CHEQUE ACCOUNTS ARE tions about these customers related to this service, inquiry can be made via the derivative transactions and CLCR (Cre- bounced cheque individual inquiry screen SHARED DAILY BY THE RISK dit Limit-Credit Risk-Receivables to be as well as the cheque report. CENTER WITH ALL RISK Liquidated) on the next business day CENTER MEMBER BANKS after the notification. SHARING INFORMATION ABOUT COMPANIES ›› Individual Inquiry: With this option, one THAT HAVE DECLARED BANKRUPTCY/SUS- COLLECTIVELY VIA THE FILE can inquire about Credit Limit-Credit PENDED BANKRUPTCY/DEBT COMPOSITION TRANSFER SYSTEM. Risk-Receivables to be Liquidated and data about derivative transactions is Information about companies that have also available. declared Bankruptcy-Suspended Bank- ruptcy-Debt Composition and which was PAID BILLS INQUIRY SERVICE published in the Trade Registry Gazette is compiled and shared with all members of Member banks notify the Risk Center of the Risk Center via the File Transfer Sys- paid bills and debtor information on a se- tem on a monthly basis. mimonthly basis. Personal data and address of the debtor, and bill amounts inclu- SHARING SERVICE ABOUT CUSTOMERS ded in the notifications, are then entered BANNED FROM USING CHEQUES into the system. Court decisions related to bans on issuing Regardless of customer status, informa- cheques and opening cheque accounts tion about paid bills is shared with all are shared daily by the Risk Center with members via the web screen application, all Risk Center member banks collectively which enables individual inquiries. via the File Transfer System.

SHARING INFORMATION ABOUT CHEQUES CUSTOMER RA PERSONAL RECORD SEARCH UNDER INTERIM INJUNCTION SERVICE

This service includes: If a court granted an Within the Ministry of Finance, Revenue interim injunction on a cheque. If a court Administration, and under the Customer lifted an interim injunction order. If a court RA Personal Record Search Service, Acti- ordered the cancellation of the cheque by ve/Inactive status is shared together with banks on a daily basis, and shared it by information on the identity of the custo- individual inquiry and collective feedback. mer, date of establishment, address including UAVT (National Address Database) code and operating area.

Regardless of customer status, information about paid bills is shared with all members via the web screen application, which enables individual inquiries.

96 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 The receipt of the customer’s RA perso- Cheque Report CREDIT RATING AGENCIES (CRAS) AND nal record via online inquiry not only im- This report pertains to bounced chequ- SHARING OF RATING SCORES proves the productivity on the member’s es, cheques paid after being processed front, but also prevents human-driven as bounced cheques, and cheques paid Banks notify the TBB Risk Center of the operational errors. upon submission, since 2009. The report credit scores assigned to customers by includes total number of cheques, total Credit Rating Agencies (CRAs), which have In August 2016, New RA Personal Record amount of the cheques, bank information, been authorized but not directly acknow- Search Web Service was launched in ad- which cheques are received, as well as ledged by BRSA, and of customers’ score dition to the existing RA Personal Record the last 50 bounced cheques processed scales. Information about natural persons Search service. With the addition of the and paid after being processed as boun- and legal entities that have been included Personal Record Change Web Service, the ced cheques. in CRA notifications is collectively shared daily changes in company/person record with all member banks, regardless of the and the type of operation are shared. Protested Bill Report fact that these persons are customers of This report contains information about these banks. CREDIT INSURANCE INQUIRY AND SHARING protested bills in the last five years, including Bank Name, Branch Name, Re- DATA UPDATING APPLICATION This service ensures the collection of cord Type (Notification or Removal), Bill monthly limit and risk information on the Amount, Protested Bill Notification Period, With the Risk Center Data Updating Appli- basis of customers who were insured by Protest Removal Period, and Reason for cation, correction of the data notified and of (buyers), and customers who have in- Removal. shared by members can be performed surance from (sellers), credit insurance instantly, without waiting for the next no- companies. In addition, compensation ACCEPTANCE & REJECTION NOTIFICATIONS tification period. Thanks to this service, applications made by the seller to insu- RELATED TO LOAN APPLICATIONS CRS, CBS, Protested Bills and Credit Li- rance companies for unpaid bills are also mit-Credit Risk data can be updated onli- shared. Credit insurance information can Acceptance/rejection status of home, ne. In 2016, research studies to implement be queried individually on the screen and auto and consumer loans; credit cards; credit insurance buyer and seller notifica- web service. overdraft deposit account; and commer- tions via the application were completed. cial loans, for which natural persons and RISK CENTER CUSTOMER REPORT SERVICE legal entities have applied, and acceptan- DATA VALIDATION AND SANCTION ce/rejection notifications related to these APPLICATION The Risk Center Customer Report service applications are collectively sent to the provides real and legal entities with re- Risk Center as statistical data. This infor- This system automatically checks whet- ports related to their own loans that have mation, obtained from the banks, contri- her KKB member data notifications are been consolidated within the Risk Cen- butes to the CBRT’s goal of fostering de- performed at intervals defined for each ter and shared with members of the Risk velopment of the financial sector. product and below a certain error rate; Center. With this service, three different and sends feedback to members so that reports can be generated with informati- SHARING OF INTERNAL RATING SCORES they can take action. When an error is de- on detailed below: tected, the system imposes a sanction in Using this system, those banks that are accordance with the rules set forth in the Credit Limit, Credit Risk, Receivables to members of the Risk Center and which Risk Center Circular. Be Liquidated have Internal Rating systems notify the This report includes information pertai- TBB Risk Center of credit scores assigned ning to credit and receivables to be liqu- to customers, their risk categories and idated, which is declared by Risk Center score scales. They also share this infor- member banks, financial leasing compa- mation with the Banking Regulation and nies, factoring firms, consumer finance Supervision Agency (BRSA). companies, asset management companies, resource organizations and other members. The report can be received in three different versions: Detailed Report, Summary Report, and Non-performing Lo- ans.

ACTIVITIES 97 15. OUR PRODUCTS PROVIDED TO TBB RISK CENTER

SEVENTEEN REPORTS This system provides the following bene- RISK CENTER BULLETIN AND STATISTICS AND ONE BULLETIN ARE fits: PUBLICATIONS SERVICES ›› Improving the quality of member data REGULARLY PUBLISHED by minimizing erroneous notification Seventeen reports and one bulletin are re- EVERY MONTH ON THE rates, gularly published every month on the offi- ›› Enabling members to create data notifi- cial website of the Risk Center of the Banks OFFICIAL WEBSITE OF THE cations in a more controlled and accu- Association of Turkey (http://www.riskmer- RISK CENTER OF THE BANKS rate manner, kezi.org). ›› Taking actions according to different ASSOCIATION OF TURKEY. types of notifications through product Related newsletters and reports include the diversification, “Credit Limit Credit Risk (CLCR),” “Personal ›› Protecting customers by ensuring the Loan and Credit Card” “Paid Cheque,” “Boun- accuracy of customer information sub- ced Cheque” and “Protested Bill” notificati- mitted to the Risk Center. ons made by members to the Risk Center of the Banks Association of Turkey. In 2017, OFFICIAL INSTITUTION AND CUSTOMER IN- content related to the “Decisions on Cheque FORMATION REQUEST SERVICES Ban” was also included in these statistics.

The Official Correspondence Team’s activi- The development and the size of the Tur- ties include responding to correspondence kish financial sector, including non-bank from customers as well as official instituti- financial institutions, along with overdue ons such as the court, prosecutor’s office, receivables are analyzed with detailed bre- police headquarters, Ministry of Finance, akdown analyses in these publications. Capital Markets Board (CMB), Social Secu- rity Institution (SSI) and the Directorate of They include basic monthly trend analyses Execution within the legally required time as well as special reports published in the frame. The team also ensures that the re- sector for the first time, such as the number ports requested by the official institutions of people, overdue receivables per city, and are produced accurately and completely the like. and become ready for submission. CTMCRS INQUIRY SERVICE MEMBER REQUEST MANAGEMENT SERVICES Company Representative Information, The Authorization Management Team’s Shareholder Information and Capital In- activities include processing members- formation as part of the Central Registry hip access forms submitted by members System (CTMCRS), under the Ministry of after controlling them in compliance with Customs and Trade, started to be shared the memorandum; and authorizing mem- with Risk Center members at end-2016. bers to have access to the applications after the controls.

Customers are protected by ensuring the accuracy of customer information submitted to the Risk Center.

98 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 THE NUMBER OF INDIVIDUAL Members can make individual inquiry fied by members to the Risk Center. War- INQUIRIES MADE BY with MERSİS number, tax identification nings are issued for customers who are number or TRID. Information related to notified by members to the Risk Center MEMBERS ON A DAILY, stock corporations, cooperatives, indivi- and involved in credit-limit, credit-risk, re- MONTHLY AND ANNUAL dual enterprises, Turkey branch of foreign ceivable to be liquidated (CLCR), individu- companies as well as their businesses ally qualified credit and credit card (CRS) BASIS IS SHARED AS A established by associations and founda- or commercially qualified credits (CBS), SUMMARY AND IN DETAIL tions is available within the service. issuers’ postdated cheque applications within banks. ON THE BASIS OF MEMBER BKM MEMBER MERCHANT TURNOVER IN- USER. IN ADDITION, WARNING FORMATION INQUIRY INDIVIDUAL INQUIRY UNIT QUERY MESSAGES ARE CREATED KKB carries out feasibility studies to rece- This service includes applications where AND SHARED IN THE SAME ive member merchant turnover informati- sharing is done based on individual qu- CONTEXT WITH MEMBERS ON on from the BKM in monthly periods, on an ery. The number of individual inquiries identity and consolidated basis. made by members on a daily, monthly A DAILY BASIS ACCORDING and annual basis is shared as a summary TO CHANGES IN THE TREND As part of the inquiry service, various in- and in detail on the basis of member user. ANALYSIS REPORT AND DAILY formation headings – such as member In addition, warning messages are crea- merchant TRID/TID, term (month/year), ted and shared in the same context with INQUIRIES. number of banks worked with, total turno- members on a daily basis according to ver – are shared. All Risk Center members changes in the Trend Analysis Report and are able to benefit from the BKM Member daily inquiries. Merchant Turnover Inquiry Service. FORCE MAJEURE INQUIRY RC WARNING SERVICES Customers who are exposed to events This product enables delivery of negative defined as force majeure are notified to notifications to requesting members with the TBB Risk Center on a monthly basis by a warning file through FTP. These negative Risk Center members. Under this service, notifications include different institutions’ which can realize individual inquiry throu- cheques, bonds, credit insurance and gh the web screen, collective sharing is tender bans belonging to the individual done on a monthly basis via FTP. and commercial customers who are noti-

HIGHLIGHTS

↗↗ Customers who are exposed to events ↗↗ Warning messages are created and shared defined as force majeure are notified to in the same context with members on a the TBB Risk Center on a monthly basis by daily basis according to changes in the Risk Center members. Trend Analysis Report and daily inquiries.

ACTIVITIES 99 WE OFFER SUSTAINABLE PRODUCT AND SERVICES TO ENSURE A SECURE ENVIRONMENT IN BUSINESS AND TRADE. KORAY KAYA

100 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 16. FINDEKS

FINDEKS OFFERS A WIDE FINDEKS As of January 1, 2017, it became mandatory RANGE OF PRODUCTS THAT by law to use the QR CODE application on USERS CAN ACCESS VIA Findeks is a financial services platform all cheques, and to record cheques with launched by KKB in 2014 to help establish QR Code in the Findeks QR Code Cheque DIVERSE CHANNELS SUCH a better functioning financial system in System, which launched as a result of in- AS THE WEB SITE, INTERNET Turkey. To that end, Findeks provides indi- novative studies of Findeks. This applica- viduals and corporations with access to tion is expected to make commerce more BRANCH, FINDEKS MOBILE credibility indicators, which the financial transparent and secure, while also boos- APPLICATION, CUSTOMER sector has used for years, thus ensuring ting production, employment, prosperity transparency and making financial mana- and trade volume. CONTACT CENTER, BANKS gement possible for everyone. AND STRATEGIC BUSINESS KKB established the Findeks Customer PARTNERS. Findeks aims to help real sector compa- Communication Center (CCC) to provide in- nies get to know each other financially; formation to consumers and offer its pro- improve their risk-taking and risk-mana- ducts and services through the call center, gement abilities; protect their capital and in addition to the website. CCC is positio- reputation; and increase their sales and ned as an effective communications cen- competitive power. Thanks to these ob- ter available to the 30 million persons in jectives and capabilities, Findeks has be- Turkey who have used/use a credit produ- come a critical tool, gaining an important ct. The Findeks Customer Communication place in Turkey’s economy in a very short Center, accessible at 444 4 552 (44 44 time. In light of Findeks services, compa- KKB), aims to deliver all services needed nies significantly improve the quality of for the management of one’s financial life. their assets, and contribute to the financial environment and the financial industry Offering users a wide range of products, in Turkey. Findeks reaches customers through its website, online branch, Findeks mobile In addition to basic products such as the application, Customer Communication Findeks Credit Rating, Risk Report, Cheque Center, banks and strategic business part- Index and Cheque Report, which cover all nerships. Findeks undertakes ongoing ef- financial indicators, KKB has filled some forts to increase the number and improve large gaps in the market with value added the efficiency of these various channels. products. For example, the Rating Consul- tancy provides expert advice on raising credit scores. Meanwhile, the Warning Ser- www.findeks.com vice enables individuals to find out whet- 444 4 552 her their financial and personal informati- www.facebook.com/Findeks on is available online, through unwanted www.twitter.com/Findeks sites. This innovative service then gives a signal when the desired financial conditions become available to the user. SECURE FINANCIAL LIFE FOR THE REAL SECTOR AND INDIVIDUALS

FAALİYETLERİMİZ 101 16. FINDEKS

THE RISK REPORT ALLOWS FINDEKS CREDIT RATING of other persons or enterprises, if they USERS TO SEE THEIR OWN have approval to do so. Findeks Credit Rating has served as a re- FINANCIAL INFORMATION IN ference guide for banks in their lending In commercial relationships, the ability DETAIL; IN ADDITION, THEY decisions for many years. This score is to see the repayment history – and thus calculated based on the credit limit, risk, the payment habits – of the other party CAN TRACK THE FINANCIAL and payment history related to personal along with credit product volume and as- PERFORMANCE OF OTHER loans that individual customers have ob- sociated risks enables an entity or person tained from banks and financial institu- to take precautionary measures against PERSONS OR ENTERPRISES, tions; credit card and overdraft deposit accounts receivable risk, thus ensuring a IF THEY HAVE APPROVAL TO accounts; as well as the extent and frequ- safe environment for trade. DO SO. ency of new credit. CHEQUE REPORT Findeks Credit Rating functions like a summary of the Risk Report. The Cheque Report contains both positive and negative information on cheques Banks and other financial institutions used in the past, and cheques issued but take into consideration the credit score not yet paid. and the payment history while assessing loan applications and managing their Differing from the Risk Report, the Cheque consumer loan portfolio. They can also Report shows the debt repayment beha- predict future payment performance. Fin- vior of a person or enterprise related to deks Credit Rating is used by the real se- the debt they owe to sectors outside the ctor as a powerful decision-support tool. financial industry. If a cheque bearer ob- tains approval from the issuer, then they Using Findeks Credit Rating, lending insti- can track the cheque payment behavior tutions offer their customers segmented of that issuer. The Cheque Report also products and services, and diversified contains information about all banks that payment options; meanwhile, lenders bo- issue cheques in Turkey. The data contai- ost automation in decision processes, re- ned in these reports relates to the period duce operating costs, and increase their after 2009 for bounced cheques and after profits. 2007 for paid cheques. Data is updated daily. RISK REPORT CHEQUE INDEX The Risk Report contains information about payment history related to active The Cheque Index is calculated based on loans and loans closed within the last five the cheque payment behavior of legal en- years. The report covers home, auto and tities and natural persons. The main fac- consumer loans, credit cards and overd- tors affecting this calculation include the raft deposit accounts. All information frequency of cheques issued over the last about these products is submitted to the 36 months, their date proximity, amounts TBB Risk Center by financial institutions and value. on a regular basis, compiled by KKB and included in the Risk Report. As a result, The Cheque Index ranges from 0 to 1,000 individuals and the real sector are able points. If an issuer fails to pay all of the to access information about credit pro- cheques, they receive a score of 0. If they ducts of all banks in a single report. The pay all of the cheques, then they receive Risk Report allows users to see their own a score of 1,000 points. However, if a per- financial information in detail; in addition, son has even one cheque that has been they can track the financial performance dishonored and is still unpaid, then the

102 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 THE CHEQUE INDEX IS Cheque Index is calculated between 1 and ›› If they delay payment on my credit car- LOGICALLY SIMILAR TO 500 points. If a person or an entity has ds, cheques, and the like. dishonored cheques, which they have ›› If an application for a credit product THE FINDEKS CREDIT paid later, then the Index is calculated (loan and credit card) is made in their RATING; HOWEVER, IT between 501 and 999 points. The Cheque name. Index gives an idea about cheque pay- CONTAINS MORE ESSENTIAL ment habits of an individual or an enterp- TRACER INFORMATION PERTAINING rise. Tracer is another exclusive benefit provi- TO CHEQUE PAYMENT The Cheque Index is logically similar to ded to Findeks customers. Tracer protects PERFORMANCE AND HAS the Findeks Credit Rating; however, it personal and sensitive information, inc- A SIMPLER CALCULATION contains more essential information per- luding ID, communication, and credit card taining to cheque payment performance data, by running extensive scans online, ALGORITHM. and has a simpler calculation algorithm. including the “dark web.” If Tracer matches the data it runs, transmitted by customers WARNING SERVICE for protection, with any online data that is used without authorization, the system Another distinguishing feature of Findeks sends a simultaneous notification to the is the Warning Service, which instantly Tracer customer. A real-time data tracking notifies customers of any changes in the service offered to individuals and enterpri- credit limits and debt status of their lo- ses through a website, Tracer is designed ans, credit cards or overdraft deposit ac- to minimize the risk of identity theft. Tracer counts. Thanks to this service, customers checks whether customers’ personal de- can keep their finances under control and tails (e.g. name, email, phone number, Tur- take action when necessary. kish ID number) or any financial information (e.g. credit card number, bank account Findeks Warning Service tracks these number, and the like) are currently circula- changes in accordance with the criteria ting on the Internet without their permissi- set by customers and notifies them via on or knowledge; the service also checks SMS or email. whether such information is being traded on the dark web. However, with these fe- The Warning Service allows warnings to atures, Tracer is not a protection service, be defined to the system. A warning mes- but rather a system for scanning, alerting sage is sent to the user under the fol- and informing. lowing circumstances: ›› If their Findeks Credit Rating falls below 1,400 points. ›› If their credit card debt exceeds TRY 10,000.

Using Findeks Credit Rating is used in the real sector as a support product that boosts automation in decision processes.

FAALİYETLERİMİZ 103 16. FINDEKS

THE RATING CONSULTANCY RATING CONSULTANCY FINDEKS QR CODE CHEQUE SYSTEM SERVICE OFFERED THROUGH The Findeks Credit Rating system aims This service enables viewing of an issu- THE FINDEKS CUSTOMER to offer customers foresight to help them er’s past cheque payment status without COMMUNICATION CENTER manage their financial lives and to ensu- an approval process, and controlling po- re that commercial relationships are built tential forgery of the cheque by having its PROVIDES CUSTOMERS WITH on solid foundations. In recent years, a QR Code scanned on the Findeks Mobile ALL THE INFORMATION THEY need for objective information has emer- Application. Along with legal enforcement ged, especially for managing, raising or functionality, QR Code cheques may now NEED. maintaining credit scores. Therefore, the be produced upon customer request from Rating Consultancy service offered throu- the bank, without consent. gh the Findeks Customer Communication Center provides customers with all the in- As of January 1, 2017, it is now mandatory formation they need. by law for all cheques to have a QR Code, and to be recorded on the Findeks QR Rating Consultancy includes: Provision Code Cheque System. of information about the benefits of the Findeks Credit Rating to individuals, about Thanks to the Findeks QR Code Cheque the range of the rating according to the System – the first-of-its-kind in the world average across Turkey, and the impor- – customers are able to check the validity tance of the rating in terms of credibility; and authenticity of cheques in a matter Consultancy service specially designed of seconds, and take precautions against for individuals on how the Findeks Credit accounts receivable risk, which arises Rating can be raised or how an already from cheque payments. high rating can be managed. LETTER OF GUARANTEE STATUS INQUIRY In 2014, KKB set up the infrastructure to deliver consulting services through CCC. The Letter of Guarantee Status Inquiry In line with its future strategies, KKB con- (LGSI) service enables customers to che- tinually works to improve Findeks produ- ck the validity of a letter of guarantee, wit- cts and services while developing new hout contacting the issuing bank. Using products. The added value generated by parameters such as Bank Name, Bran- the Findeks product and service offering ch Name, Letter of Guarantee Number, has not only changed Turkey’s perspec- Amount, Currency Code and Expiration tive on commerce, it has also created a Date, customers can run an online check new awareness about personal financial to find out whether a letter of guarantee management. KKB expects that Turkey’s has been issued, and whether an active prosperity will steadily increase, thanks risk record exists for that letter of guaran- to these challenging but very useful ef- tee. forts.

104 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 FINDEKS INDIVIDUAL MEMBERS FINDEKS COMMERCIAL MEMBERS 2,105 THOUSAND 229 THOUSAND

2 MILLION 334 THOUSAND FINDEKS TOTAL MEMBERS

FINDEKS CREDIT FINDEKS CHEQUE FINDEKS RISK REPORT RATING REPORT NUMBER OF INQUIRIES NUMBER OF INQUIRIES NUMBER OF INQUIRIES 526,111 4,457,857 247,498

FINDEKS TOTAL NUMBER OF INQUIRIES 8,687,540

BUSINESS UNITS 105 KKB ANADOLU DATA CENTER, EQUIPPED WITH THE LATEST TECHNOLOGY AT WORLD- CLASS STANDARDS, IS A BREAKTHROUGH IN THE FINANCE AND IT WORLD.

106 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 17. KKB ANADOLU DATA CENTER

KKB ANADOLU DATA CENTER The KKB Anadolu Data Center was built The Center will primarily meet the backup 2 COMPRISES A DATA CENTER, on a 43 thousand m tract in Ankara and and main data center service needs of the started operations after the completion of banks. The facility is a data center where SUPPORT BUILDING AND construction work at the end of 2016. infrastructure costs are shared and ope- A CUSTOMER OPERATION rational applications are centralized in the In December 2016, T.C. Ziraat Bank started financial industry. The Center, which offers CENTER. THE FACILITY IS to move its systems and use KKB Anadolu the most advanced technologies to Tur- DESIGNED TO EXPAND WITH Data Center as its Emergency Center. key’s financial institutions, aims to deliver cloud technology based services. These TWO ADDITIONAL DATA As of April 2017, Yapı Kredi Bank completed services will be established in compliance CENTERS AND ANOTHER moving its system and started using KKB with applicable financial legislation and SUPPORT BUILDING. Anadolu Data Center as the Emergency will maintain productivity in technology Center. investment while being available for the use by primarily sector institutions. In May 2017, KKB moved its own Emer- gency Center system and infrastructure KKB Anadolu Data Center comprises a located at İzmir IBM BCRS Center, where data center, support building and a cus- it has offered its own services and Risk tomer operation center. The facility is de- Center services, to KKB Anadolu Data Cen- signed to expand with two additional data ter. From May, KKB started to deliver all its centers and another support building. ODM services from the new location. On Equipped with the latest technologies, an October 28, 2017, KKB conducted its bu- environmental approach and high energy siness continuity test studies, which it efficiency at LEED Platinium standards, undertakes every year and includes the the Center is designed at the highest usa- capability to provide services from the bility level with TIER IV standards. It is an Disaster Recovery Center. With this effort, exemplary data center facility, in which all KKB and Risk Center services were pro- KKB’s high security standards are develo- vided via KKB Anadolu Data Center for one ped and applied. day. All services were moved to KKB İstan- bul Data Center at the end of the day and continued to be offered from there.

CENTER OF INFORMATION AND SECURITY

ACTIVITIES 107 17. KKB ANADOLU DATA CENTER

DURING THE DESIGN PHASE OF THE KKB ANADOLU DATA CENTER, THE MOST SENSITIVE ISSUES WERE THE CREATION OF A BACK-UP INFRASTRUCTURE PROVIDING CUSTOMERS SEAMLESS, FAST AND CONTINUOUS ACCESSIBILITY AS WELL AS DATA SECURITY.

TECHNICAL FEATURES OF KKB ANADOLU The hardware used in the Center, where DATA CENTER energy and data cabling is made overhe- ad the cabinet, provides high speed sup- The KKB Anadolu Data Center was desig- port to customers. ned and launched for KKB customers to securely safely protect, store and mana- FAST AND CONSTANT ACCESSIBILITY ge their data. The facility is equipped with the latest technological infrastructure Built in compliance with earthquake re- available. gulations and protected against lightning hazards, maximum attention is paid to During the design phase of the KKB Ana- physical security at the Center. There are dolu Data Center, the most sensitive issu- different levels of biometric and classical es were the creation of a back-up infrast- safety points in the campus area where ructure providing customers seamless, only authorized staff can enter. Access fast and continuous accessibility as well to the system room is possible after ha- as data security. Two different transfor- ving an iris scan via the iris reader. Bu- mers with a minimum capacity of N+1, a ilding and infrastructure management at strong generator and UPS systems provi- the KKB Anadolu Data Center is carried de energy for uninterrupted service to the out 24/7 without interruption with sta- Center, which has an electrical infrastruc- te-of-the-art automation and monitoring ture meeting Uptime Institute Tier IV requ- systems. irements. In addition, the Center features ventilation systems that provide precise climatization and 24/7 cooling and humi- dity control in case of any malfunction.

108 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 ACTIVITIES 109

OUR SOCIAL CONTRIBUTION WE CARRY OUT OUR ACTIVITIES WITHIN THE RULE OF LAW. BAHATTİN ÇELİK

112 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 18. OUR SOCIAL CONTRIBUTION

IN 2017, KKB ORGANIZED YOU IMAGINE, WE REALIZE prize winners won TRY 500. “Your Design, THE FOURTH EDITION OF THE Your Life” project that received the hig- In 2017, KKB organized the fourth edition hest score among the first prize winners SOCIALLY RESPONSIBLE of the socially responsible project com- of all the six categories was presented PROJECT COMPETITION, petition, “You Imagine, We Realize,” which with the Grand Prize of TRY 10,000. In ad- aims to raise social responsibility aware- dition to awarding the three finalists in “YOU IMAGINE, WE REALIZE,” ness and heighten sensitivity to social is- each category and the winner of the so- WHICH AIMS TO RAISE sues among university students. The jury cial media category, KKB also provided an panel, which evaluated the social respon- internship opportunity to these students SOCIAL RESPONSIBILITY sibility projects developed by university in 2017 summer. AWARENESS AND HEIGHTEN students, consisted of İbrahim Betil, Civil SENSITIVITY TO SOCIAL Society Volunteer; Yasemin Salih, Journa- THE AUDIO QUESTION BANK list; Fügen Toksü, Communication Expert; ISSUES AMONG UNIVERSITY Özlem Denizmen, Businesswoman and In the “You Imagine, We Realize” 2016 con- STUDENTS. Social Entrepreneur; Fatoş Karahasan, test, the “Audio Question Bank” project, Academician and Journalist; Can Yılmaz, prepared by Emre Taşgın, won the “Edu- Actor, Scriptwriter; Cem Seymen, Journa- cation” category first prize with the hig- list and Presenter and Writer; Kasım Akde- hest score. The project aimed to create niz, General Manager of KKB. personal, professional and academic le- arning environments for visually impaired A total of 2,080 projects were submit- individuals based on equality of oppor- ted by 1,253 students to the competiti- tunity. Audio Question Bank involves the on – where student entrants could apply transmission of updated trial tests and between December 1, 2016 and March 14, question banks prepared for the exams 2017 – in the categories of environment, such as YGS and LYS to the appropriate education, culture and arts, health and medium after being vocalized. sports, Findeks financial literacy, and society. For the first time in the history of In order to launch the project in coope- the competition, students who placed in ration with the Association of Visually the top 30 on April 26, 2017 were invited Impaired in Education (EGED) and Istan- to İstanbul one day before the award ce- bul University, Head Office of Library and remony to attend a social responsibility Documentation, Unimpeded Information workshop that was organized specially Center, A team of KKB employee volunte- for them. During the award ceremony held ers carried out the vocalization trials of on April 27, 2017, each social media first the question bank. The launch meeting prize winner and category first prize win- of the project was held on January 11, ner was awarded TRY 5,000, while each 2017 at Istanbul University. Sixteen-hund- category second prize winner received red questions were vocalized in the first TRY 3,000, each category third prize win- phase of the project, 2,354 questions in ner won TRY 2,000, each category fourth the second phase and 3,514 questions prize winner won TRY 1,000 and the fifth in the third phase. A total of 7,468 ques- FOR A BETTER FINANCIAL AND SOCIAL FUTURE

SOCIAL CONTRIBUTION 113 18. OUR SOCIAL CONTRIBUTION

ACHIEVING AN IMPORTANT tions were vocalized and transmitted to Adana. The exams were administered in CSR GOAL, KKB’S RUNNING all libraries serving the visually impaired. a health tent provided by KKB to the stu- In 2017, one in every three visually impai- dents. This allowed the medical students TEAM RAN THE VODAFONE red had access to the resources genera- to perform physical examinations on the ISTANBUL MARATHON ted under the Audio Question Bank effort patients in more sterile environment. through the online e-library of the Visual (10- AND 15-KILOMETER Impaired Technology and Education Labo- KKB’S RUNNING TEAM COURSES), WHICH WAS ratory (GETEM). This access allowed the visually impaired to be able to prepare for Achieving an important CSR goal, KKB’s HELD ON NOVEMBER 12, the exams. Pursuant to the 2017 data ob- Running Team ran the Vodafone Istanbul 2017, TO RAISE MONEY FOR tained from ÖSYM (Student Selection and Marathon (10- and 15-kilometer courses), SEED AUTISM FOUNDATION, Placement Center), the number of visually which was held on November 12, 2017, to disabled persons who applied to the 2017 raise money for Seed Autism Foundation, IS SUPPORTED BY THE ADIM ÖSYS (Student Selection and Placement is supported by the Adım Adım initiative, ADIM INITIATIVE, A REGIONAL Exam) was 1,881; the number of visually a regional running group. KKB has impro- impaired who applied to LYS (Undergra- ved the lives of 15 children, through the RUNNING GROUP. duate Placement Exam) was 796. In ac- individual contributions of the corporate cordance with the results of the exami- running team. The team raised TRY 11,816. nations, 486 visually impaired students were placed in formal education and 361 STEPTEMBER DONATION CAMPAIGN in open education. As one of the 25 institutions participa- IF YOU ARE THERE, WE ARE THERE, TOO ting in the Steptember Donation Campa- ign, KKB collected total donations of TRY The “If You Are There, We Are There, Too” 4,938.21 during the campaign and took project received the Grand Award at the 3,244,798 steps. The proceeds were pre- “You Dream, We Realize” competition in sented to Spastic Children’s Foundation 2015 by garnering the highest ranking. Pre- of Turkey to perform activities in line with pared by a group of Acıbadem University its vision. In particular, the donations will Medical School students, the innovative help the Foundation provide more training initiative included the health screening of and rehabilitation to integrate children seasonal agricultural workers and provisi- and young people with cerebral palsy into on of medical support. The first phase of society. “If You Are There, We Are There, Too” was undertaken in 2015 in Çaputçu and Tuzla KKB SOCIAL RESPONSIBILITY CLUB villages of Adana by a project team com- posed of volunteer students from Acıba- The KKB Social Responsibility Club, for- dem University and experts from Yeditepe med by volunteer KKB employees, un- University with logistical support provided dertook various social responsibility ac- by KKB. The young volunteers, who stayed tivities that will benefit all segments of in Adana for a week, gave basic physical society throughout the year. examinations to spouses and children of seasonal field workers, and to the wor- Club activities include blood donation kers after the evening break. During the drives in cooperation with Red Crescent, exams, subjects were provided with the in-house kermes, support for animal shel- awareness training on key health issu- ters, and support for books, magazines, es. The second phase of the project was technical equipment and clothes to scho- held in Adana July 3-7, 2017 with the same ols in need. In addition, donations collec- team of 17 volunteers and experts. Health ted with the benefit concerts by the KKB examinations were carried out in different staff music group were presented to The agricultural areas during the week, prima- Educational Volunteers Foundation of Tur- rily in Çaputçu Village of Yüreğir District in key (TEGV) and Seed Autism Foundation.

114 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 SOCIAL CONTRIBUTION 115

REPORTING 19. DECLARATION OF CONFORMITY FOR THE ANNUAL REPORT KKB KREDİ KAYIT BÜROSU A.Ş.

DECISION OF BOARD OF DIRECTORS

Location : Headquarters Office, Istanbul Decision Date : 28.02.2018 Decision No. : 2018/08

AGENDA: Making the decisions required to prepare for the General Assembly Meeting.

RESOLUTION: As part of 2017 General Assembly Meeting preparations, the Board of Directors unanimously decided to:

Approve the Company’s financial statements for the period, which ended on December 31, 2017;

Approve the Company’s 2017 Annual Report, and get it signed by the Chairman and the Members of the Board of Directors, in accordance with the relevant provisions of the Regulation issued by the Ministry of Customs and Trade;

Include the matter of hiring PwC Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. to conduct independent audits on the Company in accordance with the relevant provisions of the Turkish Commercial Code, as an item in the agenda of the General Assembly meeting.

MEHMET SEBAHATTİN BULUT GÖKHAN ERTÜRK CHAIRMAN OF THE BOARD OF VICE CHAIRMAN OF THE BOARD OF DIRECTORS DIRECTORS

MEHMET EMİN KARAAĞAÇ VEYSEL SUNMAN ON BEHALF OF T. GARANTI BANKASI A.Ş MEMBER OF THE BOARD OF MEMBER OF THE BOARD OF ŞÜKRÜ ALPER EKER DIRECTORS DIRECTORS MEMBER OF THE BOARD OF DIRECTORS

ON BEHALF OF AKBANK T.A.Ş. ON BEHALF OF DENIZBANK A.Ş. DEMİR KARAASLAN EGE GÜLTEKİN İZZET OĞUZHAN ÖZARK MEMBER OF THE BOARD OF MEMBER OF THE BOARD OF DIRECTORS MEMBER OF THE BOARD OF DIRECTORS DIRECTORS

MURAT BİLGİÇ KASIM AKDENİZ MEMBER OF THE BOARD OF MEMBER OF THE BOARD OF DIRECTORS DIRECTORS AND GENERAL MANAGER

118 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017 KKB KREDİ KAYIT BÜROSU A.Ş. ANNUAL REPORT OF 2017 DECLARATION OF CONFORMITY

We hereby declare that:

We have examined the financial statements, footnotes and the Annual Report pertaining to the period January 1, 2017 – December 31, 2017, and prepared in accordance with the Regulation on the Determination of the Minimum Content of Companies’ Annual Reports, which was issued by the Ministry of Customs and Trade and came into effect upon its publication in the Official Gazette dated August 28, 2012, and approved by Board of Directors’ Resolution No. 2018/08 on February 28, 2018;

Based on the information known to our Company within its area of responsibility, the financial statements and the Annual Report do not contain, within the framework established by the regulation, any untrue statement of a material fact or omit to state a material fact, which might be misleading with respect to the period covered by this report;

Based on the information known to our Company within its area of responsibility, the financial statements and other financial information included in this report, fairly and accurately represent in all material respects the financial condition and operating results of our Company as of, and for, the period covered by this report.

MEHMET SEBAHATTİN BULUT GÖKHAN ERTÜRK CHAIRMAN OF THE BOARD OF VICE CHAIRMAN OF THE BOARD OF DIRECTORS DIRECTORS

MEHMET EMİN KARAAĞAÇ VEYSEL SUNMAN ON BEHALF OF T. GARANTI BANKASI A.Ş MEMBER OF THE BOARD OF MEMBER OF THE BOARD OF ŞÜKRÜ ALPER EKER DIRECTORS DIRECTORS MEMBER OF THE BOARD OF DIRECTORS

ON BEHALF OF AKBANK T.A.Ş. ON BEHALF OF DENIZBANK A.Ş. DEMİR KARAASLAN EGE GÜLTEKİN İZZET OĞUZHAN ÖZARK MEMBER OF THE BOARD OF MEMBER OF THE BOARD OF MEMBER OF THE BOARD OF DIRECTORS DIRECTORS DIRECTORS

MURAT BİLGİÇ KASIM AKDENİZ MEMBER OF THE BOARD OF MEMBER OF THE BOARD OF DIRECTORS DIRECTORS AND GENERAL MANAGER

REPORTING 119 20. AGENDA OF THE ORDINARY GENERAL ASSEMBLY

KKB KREDİ KAYIT BÜROSU ANONİM ŞİRKETİ NOTICE TO SHAREHOLDERS FOR ORDINARY GENERAL ASSEMBLY TO BE HELD ON MARCH 28, 2018

The Ordinary General Assembly of our Company will be held at the head office of the Company at the address of Barbaros Mah. Ardıç Sokak, Varyap Meridian, F Blok, Batı Ataşehir, Istanbul at 13:00 hours on Wednesday, March 28, 2018, to examine the activities in 2017 and to discuss and take resolution on the agenda written below.

Shareholders who will be represented by proxy at the meeting must execute the proxy in accordance with the following form and send it to our Company one week before the day of the assembly.

KKB’s financial statements, consolidated financial statements, the annual report of the Board of Directors, and the profit distribution proposal of the Board of Directors shall be available for review of our shareholders at KKB headquarters as of March 10, 2017.

We kindly request our shareholders to be informed of the foregoing and to honor the meeting.

Yours sincerely,

KKB KREDİ KAYIT BÜROSU A.Ş.

MEHMET SEBAHATTİN BULUT GÖKHAN ERTÜRK CHAIRMAN OF THE BOARD OF VICE CHAIRMAN OF THE BOARD OF DIRECTORS DIRECTORS

AGENDA 1) Opening and formation of the Chairing Board; 2) Authorizing the Chairing Board to sign the Minutes of the General Assembly; 3) Reading and discussion of the Annual Report prepared by the Board of Directors; 4) Reading and discussion of the Audit Report; 5) Reading, discussion and adoption of the financial statements; 6) Release of each member of the Board of Directors from their obligations; 7) Determination of the mode of use of the profit and of the rates of profit and dividend share to be distributed; 8) Determination of remunerations and other benefits, such as bonuses, premiums, and the like of the members of the Board of Directors; 9) If any vacancy occurred on the Board of Directors and if any person has been appointed to the vacant seat during the year, approval of the appointment by the General Assembly; 10) Election of the auditor; 11) Discussion of granting of permissions to the members of the Board of Directors as set out in Articles 395 and 396 of the Turkish Commercial Code No. 6102; 12) Petitions and suggestions; 13) Closing.

PROXY FORM In respect of...... shares at par value of TRY...... in aggregate owned by our Bank in the capital of KKB Kredi Kayıt Bürosu A.Ş. (the “Company’), we appoint...... to be our proxy to represent our Bank and to cast vote on behalf of the Bank on the issues in the agenda in the Ordinary General Assembly of shareholders of the Company to be held at the address of Barbaros Mah. Ardıç Sokak, Varyap Meridian, F Blok, Batı Ataşehir, İstanbul at 13:00 hours on 28.03.2018. PRINCIPAL: Name and Last Name/Trade Name Date and Signature NOTE: If the proxy is not certified by a notary public, a notarized circular of authorized signatures of the principal must be attached to the proxy.

120 KREDİ KAYIT BÜROSU ANNUAL REPORT 2017

KKB ANNUAL

ANNUAL REPORT 2017KKB ANNUAL REPORT REPORT 2017

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