Following on from the recent partnership announcement with LexisNexis, OpenCorporates Co-founder and CEO, Chris Taggart, explains how legal entity data can fuel big data initiatives that provide business insights, support transparency, and benefit society as a whole.
Read the original version of this interview on the LexisNexis website.
Expert insights on the value of legal entity data
Chris Taggart is the CEO and Co-Founder of OpenCorporates, a database with legal entity data on 165 million companies in 130 territories. He explains how this kind of data can fuel big data [initiatives that provide business insights, support transparency in business, and benefit society as a whole.
What is legal entity data?
A company’s legal entity is what gives it the power to enter into contracts and have assets and liabilities, and these are fundamentals of the business world. When you work for a company, you don’t work for the manager or the shareholders. Shareholders and managers can change, but the legal personality is the same.
In some ways, this sort of data is deeply unsexy—it’s information that is pulled from public sources, about things like the incorporation of companies, the directors, the industry codes, the addresses, the status and so on of 165 million entities. It’s not sexy, but that’s what makes it so important and so universal.
How does open legal entity data support transparency?
Trust and transparency are critical to company information. This is not just because transparency helps to track down wrongdoers and bad actors carrying out money laundering and corruption, but it is fundamental for good business as well. Business is all about trust and you get trust with transparency.
Without legal entity data, I don’t know whether this company in, say, Myanmar or France or Australia even exists, or if the people who are contacting us are connected with this company, or what its history is. Without this information, you cannot possibly have trust, and without trust you cannot have a good business environment.
How can it benefit society?
What we’re talking about is creating societies where there are companies that are, for example, innovating in agriculture and producing food, goods and services. We’re talking about a vibrant, trusted economy. I don’t see that there is any possibility of doing that without making sure that the existence of those companies and the connections with those companies is not just visible but actually data that is freely available to everybody.
Can it support sustainable development and achieving the UN Sustainable Development Goals, for example?
One of the crucial requirements for sustainable development in the widest sense is making sure that we have effective, fair, transparent business markets that people can enter into and take risks.
Business is a risky thing but those risks should be around questions like “have I made the right decision about this product?” or “is this the way we should be serving our clients?”, not “am I going to be competing with people who have got an inside track?” or “is my license going to be withdrawn because of corruption or the lack of rule of law?”
So, I think allied to important aspects of the rule of law is transparency around data on company information. Trusting that information and understanding who you are doing business with is absolutely fundamental to these goals.
You say your company’s model is a “virtuous circle”, what does that mean?
We have hundreds of thousands of people accessing our information online without paying any money. Many of them, such as banks, business information companies and governments, need the data at scale. Rather than just doing an individual search, legal entity data can be integrated into their workflows and combined with other datasets for analysis.
The reason our data is so attractive is precisely because we have hundreds of thousands of disparate users using the data and that is a quality feedback loop that is unrivalled anywhere else. Then the money we get from commercial users, together with our deep domain expertise, supports our ability to collect even more data and publish it for free.
The more people using our data for free, the higher our data quality, which makes more people want to use us in their business processes, which generates money, and so on. This is what we mean by a virtuous circle.
How is good quality data important when companies apply technology to the data?
When you are looking at the way technology is going in the future, there are a lot of new and exciting technologies which generally have transformational powers—blockchain, smart contracts, Artificial Intelligence (AI). One universal requirement is good data to fuel these systems. When you’ve got skewed, bad, incomplete, black box data going into the system, the chances of success with AI are low. Without trustworthy data, applications like deep learning or machine learning (ML) will struggle to make sense of data and develop useful algorithms or insights.
This is where we’re going with data. It is about taking structured provenance data that you can trust. You can put the data into algorithms and use it to drive ML. You can apply ML and AI and deep AI to it and understand what you get and have confidence in what you get.
How widely can legal entity data be used?
There is almost no section of the business world, and those that regulate and service it, that isn’t part of our user base. This includes lawyers, journalists, NGOs, governmental people, regulators, law enforcement, businesses and banks.
If you don’t know who those entities are, you don’t know if they really exist, then already you’re in a bad place before you’ve even really started. That’s why OpenCorporates is being used increasingly to provide the foundational data for these sorts of systems.
The power today when we’re looking at data comes not on a record-by-record basis, but from having it as structured data that you can do things with, and nowhere is this truer than when you’re looking for insights in the data.