FinTech Alliance.PH, a self-regulating organization and leader in expanding the fintech industry in the Philippines, has welcomed the use of data and data analytics as a means to create new and inclusive ways of credit scoring.
“This will allow more Filipinos, especially the unbanked and the underserved, to gain access to financial services,” the organization said in a statement.
With the Philippine FinTech Alliance leading the charge, industry players and financial institutions will now be able to adopt ways to obtain and share information via traditional data, big data, and alternative data to provide new and improved financial services and products to consumers.
“This is a welcome development for the FinTech Alliance, especially for the unbanked and underserved Filipinos, which is part of our goal this year. We will continuously innovate and sustainably expand the digital finance system to help improve the country’s economy,” said Angelito M. Villanueva, Chairman of FinTech Alliance.PH.
Advocating the use of alternative data for credit risk analysis
The Fintech Alliance is one of the staunchest advocates of using alternative data for credit to finance.
Unlike traditional data, which is based on factors such as credit history and on-time payments, alternative data use various sources like social media, utilities, and behavioral transactions online, among others, to assess a debtor’s payment capacity. This would make credit and lending accessible even to those who don’t use financial products and services.
“Given the developments in digital technology with all of this credit scoring algorithm, alternative scoring, and many more, you can come up with alternative data scoring to cover the unbanked and underserved Filipinos. This way, consumers would now have a greater chance of gaining access to responsive and responsible credit. The whole idea is how we can protect our borrowers from predatory lenders and from illegal lenders as well,” Villanueva said.
chance of having to access responsive and responsible credit. The whole idea is on how we can protect our borrowers from predatory lenders and from illegal lenders as well,” Villanueva said.
Big data and analytics to create better and more inclusive financial services
The emergence of more digital banks, cryptocurrencies, e-wallets, and e-commerce platforms has led to a wide array of ways with which to reach customers and make user data readily available.
With the use of a massive network of generated data and technological innovations such as cloud and alternative intelligence (AI), big data analytics can help in mining, processing, and interpreting data so finance service providers can better understand consumer profiles, behaviors and needs on a macro scale.
“The insight coming from these big data analytics can help fintech players, and of course, other BSP-Supervised Financial Institutions, to develop products and services that are more agile, frictionless, and responsive to the needs of our customers,” Villanueva explained.
Big data also helps in mapping the scale of financial inclusivity in the country, with which to better assess the needs of the unbanked and the underserved, especially those in geographically isolated areas.
“It is a necessity in our businesses, and our decision-making processes must be based on empirical data. We have to leverage and we have to optimize the value of big data especially in catering or servicing the unbanked members of the Philippines,” Villanueva added.
Fintech Alliance.PH is one of the biggest contributors in the Philippines’ fintech industry, which brought 90% of fintech-initiated transaction volume in the country. True to their core values – integrity, inclusion, innovation, and collaboration, Fintech Alliance works alongside the Bangko Sentral ng Pilipinas (BSP) to further promote financial inclusion and payment digitalization.
Fintech Alliance.PH also plays a critical role in the BSP’s twin goal of having 50% of financial transactions to become digital and getting 70% of Filipino adults becoming a part of the financial system by 2023.
Aside from the BSP, Fintech Alliance.PH also works with vital institutions such as the Philippine Congress, Securities and Exchange Commission (SEC), National Privacy Commission (NPC), and Credit Information Corporation (CIC) to help advance the fintech industry in the Philippines.