Vietnam’s Unbanked Can Now Get Credit Cards With Just A Phone And Good Behaviourby Fintech News Singapore November 5, 2018
Personal finance comparison website GoBear and alternative credit scoring provider CredoLab announced that they’re teaming up to launch Easy Apply, a smartphone app that enables banks, financial institutions and lenders to extend credit to a larger pool of customers while keeping risks in check.
The partnership is partly aimed at making financial services accessible to the 49.5 million unbanked people in Vietnam, though the platform will also be launched in Indonesia, Philippines and Thailand.
The target market for this platform are, according to a press release, between 65% to 75% of the Southeast Asian population that lack access to credit, despite many being creditworthy consumers.
The app will utilise CredoLab’s AI-based algorithms that claim to extract and analyse over tens of thousands of data points from applicants’ smartphones, which they claim turns these anonymised digital footprints into predictive credit scorecards for credit card applications, loans or insurance applications.
While banked populations remain low in many Southeast Asian regions, a report by Google and Temasek Holdings revealed that 90% of Southeast Asian internet users are on mobile phones, which could turn users’ smartphones into a more accurate and valuable credit-scoring avenue then a credit score would in the same region.
The platform’s impact, or lack thereof in both Vietnam and the overall Southeast Asian region remains to be seen, but there is definitely big potential in utilising mobile phones as a form of credit scoring, even outside of the Southeast Asian markets and beyond the unbanked.
With the average credit card penetration in Southeast Asia (with the exception of Singapore and Malaysia) at just 5 percent, financial institutions which actively engage in financial inclusion activities, stand to earn an estimated USD88 billion in revenue by 2020, according to a report released by Ernst & Young earlier this year
The Easy Apply app, while serving as its own platform, will be integrated into the GoBear consumer’s user journey. A user would start by using the Easy Choices feature on the GoBear platform, which would curate products that the platform deems suitable for the customer’s profile. Only then will the user download and instlal the Easy Apply app onto their phones to generate their digital scorecards.
The Easy Apply function is kicking off with credit cards, but the partnership hopes to extend into personal loans, insurance and other lines of credit in the near future.
“We are very pleased that Vietnam will be one of the first markets to launch the Easy Apply app. With new technology, we will be able to help our partners to better serve the unbanked, and enable our users to access useful and affordable financial products at the same time.
Improving financial inclusion and serving unbanked consumers is very important in an emerging market like Vietnam, and we are excited to be part of this meaningful journey.”
The Easy Apply app will be an integrated part of GoBear’s user journey. It begins with GoBear’s Easy Choices feature, which helps applicants understand which set of products better suit their profile, before downloading and installing the Easy Apply app onto their smartphones to generate their predictive digital scorecards.
Easy Apply will kick-off with the credit cards segment and extend to personal loans, insurance products and other lines of credit in the near future.
Featured image credit: Edited from Unsplash