A Conversation with Rick Smith

How will further development of the Equifax technological competencies impact capital investment?

The Equifax business model is a strong one that historically has had a low level of capital investment, generally less than 5 percent of revenue. We have acquired and developed a portfolio of industry-leading technologies without straying far from this model. Moving forward, we will continue to reinvest in our core businesses by building on our technological capabilities. At the same time, our existing technologies have not yet tapped their full potential, and require the least amount of capital of any growth initiative. We can realize a healthy growth rate by accelerating the penetration of Equifax InterConnect™, Equifax Accel™, APPRO® and other Enabling Technologies solutions while finding new applications for them.

How is Equifax Enabling Technologies positioned in the marketplace, and are your competitors pursuing the same strategy?

Our market position is very strong. Thanks to our investments made in the last 10 years, Equifax has been able to establish itself as the clear market leader in enabling technologies and, in fact, is widening this lead. We have an installed base of more than 1,000 customers today – quite a competitive advantage. With the acquisition of APPRO, we have further strengthened our position in the financial services industry by leveraging its reputation in the credit and lending markets, especially with small banks and credit unions. It is also interesting to note that even though there is more competition today than a decade ago, we have retained our decisioning technology customer base.

Given the increasing incidence of data security breaches, what is Equifax doing to secure its data?

Equifax has been safeguarding sensitive information for more than a century. In our business, there is nothing more important than data accuracy and security. We speak internally of security being a part of our corporate DNA because it is fundamental to every decision we make. When we evaluate a new business opportunity, for example, the level of security is a major consideration. If it doesn’t meet our standards, then we do not move forward. It’s also important to remember that we are in the fraud protection business. We empower consumers and businesses through our fraud protection products and authentication technology.

How do you work with consumers to empower themselves against identity theft?

Education comes first. I encourage everyone reading this report to visit www.equifax.com. You will find a wealth of information about managing and protecting your personal financial health that would benefit any of us. Second, our Personal Solutions group continues to innovate and introduce affordable, practical and effective tools consumers can use to fight identity theft.

On the growth front, how are you going to extend the Equifax franchise?

Just look at our results in 2005 and you will find plenty of examples of how we’re growing. In our North American Information Services business, enabling technologies transactions’ growth is outpacing core information transactions’ growth by 4 to 1. This is fueling top-line growth, while also protecting our margins. Look at our phenomenal success in Latin America, where we have leveraged our analytics and technology to become a stronger partner with customers. On the consumer side, Personal Solutions did not exist five years ago. Today, it is a more than $100 million in revenue business thanks to innovation and technology. Commercial Solutions in the United States is another great example of how we have leveraged our internal capabilities to address a market need. Going forward, you can expect to see more of these strategies in play. Equifax has proven it knows how to grow. My job is to accelerate the pace.

Are acquisitions a part of this strategy, and, if so, what are your criteria?

Mergers and acquisitions (M&A) is only one of the growth levers we will pursue. We approach M&A activity the same way we will approach our business initiatives – it must meet tough standards for strategy, process and execution. In other words, there must be a definitive strategic rationale. There must be a definitive financial benefit. There must be a definitive integration plan.