The Rizal Commercial Banking Corp. (RCBC) is pushing for the creation of a scorecard that can be used to assess the risk profile of the unbanked, who now face a great challenge since they have no credit history or banking information.
The scorecard will be improved further by using external information such as personality, behavioral data, as well as public data. The move is expected to help improve the credit eligibility of the unbanked, which is now pegged at 71% of the country’s total adult population.
RCBC, which is one of the most trusted universal banks in the Philippines, will also be advocating financial literacy and discipline among underserved Filipinos.
In pushing for a scorecard, the Yuchengco-led bank seeks to address challenges that the bank faces when evaluating loans to the unbanked. It also hopes to accelerate financial inclusion among Filipinos through data analytics.
Once the scorecard has been put in place, the bank is hoping that it could help them assess a borrower’s credit history better and accelerate the process of loan approval.
Finding ways to make credit available to the unbanked
Bennett Santiago, head of the credit management group at RCBC, explained, “From a credit perspective, we are now trying to find ways to make credit available to the unbanked, and we’re basing it on how they spend government subsidies.”
Santiago added that the bank saw the importance of data analytics during the pandemic. He noted how data analytics helped them improve their collection strategy at the height of COVID-19 and enabled the bank to implement data-driven decisions to mitigate risk.
“Understanding delinquency drivers, on a customer level, was made possible through the use of data science and analytics,” he said. “We needed to have a differentiated customer review. We couldn’t have a one-size-fits-all type of monitoring. We believe that we should spend more time on high-risk and low-risk accounts, and this is where the possibility of digitization, automation, and machine learning can take place for credit risk management.”
Meanwhile, the Credit Information Corporation (CIC) has recently classified RCBC as an accessing entity, which allows the bank to access borrowers’ credit information either directly from the CIC or through any of its accredited bureaus, namely CIBI Information Inc., CRIF Philippines, and the Transunion Information Solutions.