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Industry: Digital Lending

Lending Affordability and Regulations in the Nordics: Navigating Rising Debt and Consumer Protection

Lending Affordability and Regulations in the Nordics: Navigating Rising Debt and Consumer Protection

The Nordic countries—Denmark, Finland, Iceland, Norway, and Sweden—have long been celebrated for their stable economies, strong social safety nets, and sound financial systems. However, rising household debt and escalating housing costs are placing increasing pressure on lending affordability, prompting regulators to implement stricter controls to ensure responsible borrowing and protect financial stability. Adding to these challenges, global economic factors such as inflation, interest rate hikes, and geopolitical tensions are significantly impacting the Nordic lending market.

As a result, Nordic borrowers are finding it increasingly difficult to manage their debt and maintain affordability. Household debt has surged across the Nordics, especially in Sweden, where the debt-to-income ratio has surpassed 150%. Many consumers are now struggling with higher mortgage payments, causing regulators to step in.

Consumer Loan Restrictions

Nordic governments are increasingly imposing restrictions on consumer loans to protect borrowers from predatory lending and unmanageable debt, in addition to tightening mortgage regulations. Finland, for example, has capped interest rates on consumer loans at 20%, while similar actions are being implemented across the region to address high-interest lending. Each country is tackling lending affordability with distinct measures. Sweden, for instance, emphasizes amortization requirements to reduce debt levels over time, while Denmark focuses on income-based lending caps to ensure that borrowers do not take on more debt than they can afford. These country-specific approaches highlight the region’s nuanced strategies for maintaining financial stability and protecting consumers in a challenging economic environment.

Looking ahead, stricter regulations could reshape the financial services landscape in the Nordics, potentially slowing growth for lenders while encouraging more sustainable lending practices. Lessons from past regulatory cycles in other regions, such as tighter controls in the U.S. and Europe following financial crises, suggest that while short-term growth may be impacted, long-term stability and consumer trust could improve, setting the stage for a more resilient financial sector.

Exploring the Role of Technology in Affordability

But, thankfully, the rapid advancement of technology is reshaping the financial services landscape in the Nordic region, where digital lending platforms, open banking, and fintech innovations are driving significant changes in how consumers access credit. While these technologies offer unparalleled convenience and inclusivity, they also introduce complexities related to lending affordability. Are these innovations making it easier for consumers to secure loans, or are they exacerbating the issue of rising debt?

Digital Lending and Fintech: Balancing Access and Risk

Digital lending platforms and fintech solutions have made borrowing more accessible than ever. In the Nordics, where internet penetration is among the highest in the world, consumers can now apply for and receive loans entirely online, often within minutes. These platforms leverage open banking frameworks to access a wider range of financial data, allowing lenders to make more informed decisions about creditworthiness. This streamlined approach has expanded access to credit, particularly for underserved populations who may have struggled to secure loans through traditional banks.

However, this ease of access presents a double-edged sword. While consumers certainly benefit from the convenience, there’s also a risk of over-borrowing, as the simplicity of digital lending can sometimes lead to impulsive financial decisions. The seamless user experience offered by many fintech platforms can obscure the long-term financial implications of taking on more debt. For lenders, this raises the question of how to balance innovation with responsibility. Regulatory bodies in the Nordics need to closely monitor these developments to ensure that technological advancements don’t compromise financial stability.

AI in Affordability Assessments: A Smarter Way to Lend

Artificial intelligence (AI) is playing an increasingly pivotal role in refining affordability assessments. By analyzing vast amounts of data—from spending patterns to employment history—AI-driven tools offer a more holistic view of a borrower’s financial health than more traditional credit scoring methods. These tools can detect nuances that human analysts or outdated systems might miss, ensuring that lending decisions are based on a comprehensive and real-time understanding of a borrower’s ability to repay.

For lenders, AI offers the dual benefits of improving accuracy and reducing risk. By predicting a consumer’s likelihood of default with greater precision, AI-driven affordability assessments allow lenders to adjust their loan offerings accordingly. This means that consumers are less likely to be approved for loans they can’t afford, mitigating the risk of rising debt levels. Additionally, AI-powered automation helps lenders streamline their operations, reducing the time and cost associated with manual assessments.

In the Nordic region, where regulators are tightening lending criteria, AI is becoming an essential tool for compliance. Lenders can integrate AI into their decision-making processes to ensure they meet strict affordability guidelines while continuing to provide accessible credit to consumers. The use of AI also helps reduce bias in lending decisions, as algorithms are trained to assess objective financial indicators rather than relying on potentially flawed human judgment.

Danske Bank is one successful example. They’ve integrated digitalization and advanced data analytics into their lending process, which has helped the institution manage affordability risks more effectively. The bank’s “Sunday” mobile app uses AI to provide personalized financial advice, helping customers make informed borrowing decisions. Additionally, Danske Bank has implemented income-based lending caps, ensuring that borrowers do not take on more debt than they can afford while leveraging digital tools to continuously monitor customers’ financial health and proactively engage them when needed.

Looking Ahead: Strengthening Risk Management Systems

Lending affordability remains a critical issue in the Nordics, as regulators seek to balance financial stability, consumer protection, and economic growth. With rising debt levels and increasing pressure on households, regulatory frameworks will continue to evolve to ensure sustainable lending practices. As these changes unfold, lenders must prepare strategically by prioritising investments in technology that enhance data-driven decision-making and improve compliance with stricter regulations. Strengthening risk management systems will be essential for adapting to evolving market conditions, while a focus on consumer engagement through personalised, transparent lending experiences can help build trust and retention. By staying ahead of regulatory shifts and leveraging innovation, Nordic lenders can navigate this complex landscape and ensure long-term stability and growth.

By leveraging fintech innovations and AI, lenders in the Nordics have the opportunity to enhance affordability assessments and promote more responsible lending. However, they must also remain vigilant about the potential downsides of making borrowing too accessible. Balancing technological progress with responsible lending practices will be crucial in ensuring that consumers are protected and that lending remains sustainable in the face of rising debt.

Discover how Provenir’s AI-Powered Decisioning Platform can promote more responsible lending.

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Blog: The Future of Collections for Wireless Carriers/Telcos

The Future of Collections for Wireless Carriers/Telcos

Best practices and recommendations for more efficient, personalized collections strategies

  • Authors:
    Michael Fife VP Sales & Consulting, US, Provenir
    Sam Rohde Director, PreSales, North America, Provenir
    Andy Beddoes Principal Consultant, North America, Provenir

Collections activities enormously impact the financial performance of U.S.-based wireless carriers. There are 1%-5% of all U.S. subscriber accounts in delinquency at any given time. And with over 450 million post-paid wireless accounts active in the U.S. and an average past due balance between $200 and $300, that means there are over $3 billion dollars that are past due and at risk. To combat these startling stats, wireless carriers need to take advantage of new innovations in advanced analytics and holistic, cloud-native risk decisioning solutions to execute best-practice treatments before consumers go past due. Telcos that deploy advanced analytics to get ahead of payment risks see up to a 10% improvement in recovery rates when compared to those who use legacy processes and static scorecard methods.

Adopting these newer innovations and best practices can drastically reduce operating costs within your collections functions and also increase returns on collections activities. The ease with which internal and third-party data sources can be integrated and orchestrated, and the ease with which advanced analytics can be set up, tested and promoted to production, are primary drivers of these returns on investment.

So we’re looking at exactly what these best practices are for pre-collections and collections decisioning, and what has worked for large telco organizations around the globe.

Decisioning Strategies: Best Practices for Pre-Collections and Collections

Looking at best practices from telco companies around the world reveals that a collections risk decisioning strategy for wireless carriers should consist of at least seven key components. And the platform upon which these are configured and executed must allow simple, self-service access for business users to set up, test, and deploy each component without added burden on tech teams or IT.

  • Champion / Challenger: Can you implement independent and in-stream testing of objects that execute further down in a flow? An unlimited random number generator that divides decisioning down two or more flows allows for complex testing strategies to be executed, which is important for fine tuning the impact of strategies on collected balances and is a best-practice first step.
  • Calculation of Attributes: Be sure you can enable the ingestion of internal and external data to calculate attributes such as days past due, debt-to-income, skip trace required, and other variables useful in predicting behavior and best treatments.
  • Reasons for Collections: The third critical component is being able to calculate internal data that is useful for segmentation, including but not limited to billing cycle data, promise-to-pay broken, skip trace required, and other attributes.
  • Portfolio Segmentation: Can you execute portfolio segmentation in real-time, based on the data your decision engine has ingested to determine the appropriate collections stage (early, mid, late, or more divisions) and subsequent actions?
  • Configurable Collections Stages: Ensure the creation of configurable, divided collections stages where distinct actions and treatments can be executed based on the segmentation characteristics that were executed in the previous step.
  • Scoring Models: The ability to test and deploy advanced analytics that drive the treatments are crucial to successfully increasing balances collected. These include everything from behavioral scorecards and roll-rate models, to risk grades and proposed settlement amounts, that inform the best communication channels, timing, tone, offers and other actions.
  • Treatments: Each of these previous steps lead to you being able to automatically push actions through existing communication channels (SMS, email, push notification, phone, etc.), informing the tone, the settlement offer, and other iterative actions that drive collected balances. Because not all channels elicit the best response – for example, 73% of Gen Z consumers say SMS is best for reminding when payments are past due. This is where the use of advanced analytics can help, informing the right options for individual customers.
A Configured Best-Practice Collections Decisioning Workflow

Modern, cloud-native risk decisioning solutions allow business users to administer the creation and testing of individual decisioning objects or nodes. These nodes interact with each other either concurrently or sequentially and range in complexity from simple business rules to advanced analytics, which users can then create and manage through a low-code interface to improve returns on collections activities. Additionally, decisioning software that is user friendly reduce the technical burden and operating costs of the collections function. What does this mean? In short: business users must be able to manage the end-to-end flow in both test and production environments without having to involve IT.

Here’s an example of a best-practice collections decisioning workflow, which comes from dozens of large-scale implementations thanks to the subject matter expertise of risk and collections professionals. They created this end-to-end sequence for wireless carriers to use, and it can be modified as necessary to adapt to different requirements in order to efficiently execute next-best treatments.

The workflow pictured above uses a combination of on-us behavior data, off-us behavior data from 3rd parties such as credit bureau and speciality telco data, previous contact history data, and socio-demographic data. All of these combine to build a holistic, comprehensive view of a delinquent customer, as outlined in the seven components we described.

  • On-us behavioral data includes the customer’s payment history, delinquency history, and returned checks, among other attributes.
  • Off-us behavioral data involves third-party data sources that provide insights into a customer’s financial obligations and commitments, as well as updates on their behavior based on almost real-time updates.
  • Previous contact history data is critical in learning from previous collection contact attempts and modifying the treatment approach accordingly.
  • Socio-demographic data can be used to build customer profiles to assist in selecting the appropriate channel of communication.

Leveraging these various data sources and applying advanced analytics such as random forest or XGBoost machine learning techniques to predict behavior, propose settlement amounts, and to gauge time and channel preferences allows collection teams to build a more targeted, personalized approach to collections, based on customer preferences and circumstances.

Making a significant departure from more traditional, legacy processes (which often rely on core static classifications such as days past due or single risk scores), this new approach highlights a more modern, individualized way of ensuring efficient, effective collections strategies. By evolving beyond logistic regression and decision trees to next-generation collections models that lean on machine learning (which learns from previous nodes within its model construct), the final customer treatment is much more personalized, focused on outcomes and response propensity.

Looking for an assessment of your own risk decisioning strategies for collections?

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Round-up: Top Organizations Leading in Embedded Finance

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Round-up: Top Organizations Leading in Embedded Finance

How these tech pioneers are seamlessly integrating financial services into everyday platforms

Embedded finance has quickly emerged as a game-changer in the industry, with a predicted global market size of $348.8 billion by 2029, at a growth rate of 30% CAGR from 2023-2029. By seamlessly integrating financial services into non-financial platforms, companies are able to streamline operations and enhance the customer experience, creating frictionless journeys and improving customer loyalty and retention. Major players are on both sides of the fence – both those successfully weaving financial services directly into their core offerings, and those supporting this wave of tech innovation with cutting-edge solutions and APIs that empower embedded financial services. We’re looking at both – how these industry leaders are dominating the embedded finance area and the crucial role their tech partners play in making this integration happen.

  • aliexpress
    Based in Asia, this online eCommerce platform brings together a ton of small producers who sell everything from clothing and accessories to electronics and sporting goods. Originally created by the Alibaba group over a decade ago, the website operates similarly to Amazon, but doesn’t produce anything of its own – instead its platform is a showcase for others, bringing a number of products into one site and facilitating easy payment options.
  • booksy
    Originally founded in Poland and now available worldwide, Booksy is a leading appointment management platform for wellness/beauty/health providers, allowing customers to book local appointments for haircuts, massages, and aesthetic services. With the integration of Stripe, they were able to embed payment processing directly into their app, including an omnichannel solution that allows Booksy merchants to collect payments in person, within the app, or at the time of booking, ensuring seamless payment experiences for customers.
  • uber
    The world’s favorite ride-share app, Uber offers in-app payments, ride insurance (to protect both riders and drivers), and instant drive payouts, ensuring a seamless payment experience for riders and immediate access to earnings for drivers. They’ve also expanded to offer food delivery options, as well as a variety of different ride types to appeal to a wider range of customers.
  • amazon
    The undisputed gold standard of eCommerce is Amazon, offering embedded finance in a variety of ways, including payment, lending, and Buy Now, Pay Later options. With integrated payment and finance options across a variety of global sites and sellers, Amazon enhances customer convenience and supports its wide range of sellers with quick financing and access to funds.
  • shopify
    Canadian success story Shopify simplifies payment processing for merchants in a variety of industries, offering them quick access to funding and financial management tools. Now a multinational organization with embedded offerings available on their proprietary eCommerce platform, their solutions include a variety of types of products that focus on everything from online storefronts and point of sale options, to returns management, shipping, order fulfillment, B2B, and financial management.
  • apple
    A name recognizable to the entire world, Apple is one of the pioneers of embedded financing, making Apple Pay a widely used option for everyone (read, millions and millions of people) who owns iPhones. With Apple Pay, Apple Card, and Apple Cash, they’ve integrated secure and convenient payment options directly into Apple devices (including watches), offering a frictionless payment experience for users.
  • starbucks
    The Starbucks app, which began as a way to improve customer loyalty by allowing users to earn rewards points on purchases, has quickly morphed into an extremely convenient rewards/payment system. You can reload funds to your mobile card at the click of a button, pay in-app for purchases, order ahead, earn rewards points, and then redeem them seamlessly, enhancing customer loyalty and ensuring a positive experience end-to-end for customers.
  • stripe
    An American multinational financial services company, Stripe offers a comprehensive suite of payment processing APIs and financial infrastructure for businesses, enabling organizations of all sizes to easily integrate payment services into their platforms. With millions of customers worldwide, including well-known brands like Marriott, BMW, and WhatsApp, their fully integrated payments products are used to optimize checkout conversion and launch new business models effortlessly.
  • plaid
    Similar to Stripe, Plaid works behind the scenes of some of your favorite brands, providing APIs for secure access to financial data and services that enable seamless connections between financial services and apps. Based in the U.S. but operating in a number of countries across North America and Europe, Plaid enables consumer apps to effortlessly connect with users’ bank accounts in a secure way.
  • marqeta
    Providing card issuing and payment processing technology, Marqeta is used by industry leaders in a variety of use cases, including on-demand delivery, expense management, retail, and digital banking. By enabling companies to create customized payment cards and solutions, they facilitate embedded financial services for their customers to allow them to deliver exceptional, brand-elevating customer card experiences.
  • walnut
    Providing seamless payment options for insurance premiums, along with instant, personalized insurance quotes and policy management through its online platform, Walnut Insurance is a prime example of embedded finance in the insurance industry. They offer value-added services that go beyond traditional insurance, including wellness benefits and services like access to mental health resources, directly into their platform, exemplifying the innovative use of embedded finance.
  • balance
    A platform focused on B2B trade platforms, distributors, and brands across the B2B supply chain, Balance powers the entire transaction lifecycle, with software and APIs that allow merchants and marketplaces to accept business payments, optimize AR, and extend trade credit. By focusing entirely on B2B, they’ve built a platform that incorporates all aspects of financing and payment processing to enable innovation and growth for their customers.
  • grab
    Southeast Asia’s leading superapp, Grab provides everyday services including deliveries, hotel bookings, gift cards, and ridesharing, while also embedding financial services like payments, insurance, and micro-lending. With a goal to enhance customer convenience and drive engagement, they offer services for consumers, drivers, merchants, and even enterprises – driving economic empowerment for everyone in the region.
  • mercado pago
    Based in Argentina and boasting one of the largest user bases in Latin America, Mercado Pago enhances eCommerce by integrating financial services that support seamless transactions and provide credit options to both buyers and sellers, including digital wallet, payment processing, and financing plans.
  • synchrony
    In part an online marketplace, Synchrony allows you to find deals on whatever your heart desires, and then provides you with various ways to pay, including credit cards, personalized financing offers, and Buy Now, Pay Later plans. They also offer individualized banking plans and products, financial solutions for businesses, and even healthcare financing for you, your family and your furry friends.

Companies across the globe are leading the charge in embedding finance into their services, transforming customer experiences, and driving growth. These examples (among many!) demonstrate the immense potential of embedded finance to streamline operations, enhance customer satisfaction and loyalty, and open new revenue streams. For those looking to explore embedded financing options, Provenir’s AI-powered risk decisioning solutions can enable you to integrate financial services seamlessly, manage risk effectively across the lifecycle, and deliver exceptional value to your customers.

Want more info on how Provenir can power your embedded finance journey?

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Embedded Finance: Enabling Seamless Financial Services

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Embedded Finance: Enabling Seamless Financial Services

Unlocking new opportunities and enhancing the customer experience
Embedded finance has been changing the way financial services are delivered, integrating them directly into everyday consumer activities. Imagine securing a loan directly from your favorite online store, or getting trip insurance coverage while booking a vacation. Many of us have utilized embedded finance services without ever having had a name for it. As more businesses adopt these integrated solutions, the potential for improved customer satisfaction, loyalty, and retention is significant – not to mention new revenue streams. We’re looking at the benefits, challenges, and future opportunities of embedded finance, offering you insights into how to leverage this trend for an enhanced competitive edge and a way to provide exceptional value to your customers.

The Power and Potential of Embedded Finance

Embedded finance, referring to the integration of financial services into non-financial platforms, is enabling businesses to offer banking, lending, insurance, and payment services directly within their existing products, whether those are applications, websites or other platforms. The trend is gaining traction rapidly, in part due to its ability to create more cohesive, seamless user experiences and streamline financial transactions. The value of embedded finance in 2022 reached $66.8 billion, but estimates put that figure at $622.9 billion by 2032, highlighting how it’s poised to become a dominant force in the industry. This growth is driven by the increasing demand for convenience and the desire for businesses to differentiate themselves in a competitive market by integrating innovative financial solutions. Companies across various sectors, from travel to retail and everything in between, are recognizing the value of creating super-apps or platforms that incorporate a variety of types of services (including financial) to enhance customer loyalty and create new revenue streams.

Uber and Shopify are just two big-name examples of organizations already leveraging embedded finance to enhance their services. Uber, the ride-sharing titan, offers instant payments to drivers, while Shopfiy allows for merchant cash advances and payment processing right in its proprietary platform. Likewise, retail giant Amazon offers its customers buy now, pay later (payment in installments) services right at checkout, and Tesla offers its car buyers insurance options, streamlining the process of getting coverage for their new vehicles. So why is embedded finance so popular?

Unpacking the Benefits of Embedded Finance

There’s a ton of benefits that embedded finance can offer to enhance your business operations and the experiences of your customers. Let’s take a closer look.

1. Flexibility
  • Adaptive Solutions: Embedded finance providers highly flexible financial solutions tailored to meet the specific needs of your customers. For example, you can offer customized lending products based on individual customer profiles, which can be seamlessly integrated into the purchases process. Adaptability like this ensures that financial services are more accessible and highly relevant to each individual customer, enhancing their overall experience.
  • Real-Time Access: A standout feature is the provision of real-time access to financial services. Your customers can instantly access loans, make payments, or secure necessary insurance without the delays associated with more traditional banking processes. This immediacy improves customer satisfaction while also increasing the likelihood of customers completing transactions and reducing cart abandonment.
2. Competitive Edge
  • Market Differentiation: In a crowded space, embedded finance is proving to be a key differentiator. Offering integrated financial services allows you to stand out from the competition, and provides you an edge over those who don’t.
  • Increased Revenue Streams: Open up new avenues for revenue generation with the integration of financial services like payment processing, lending, and insurance.
3. Enhanced Customer Experience
  • Seamless Integration: Simplify the user journey by integrating financial services into everyday customer interactions. Without having to leave an app or website to complete a financial transaction, your customers will enjoy smoother, more convenient experiences.
  • Personalization: Embedded finance allows for a higher degree of personalization, with financial services tailored based on customer data and behavior – and ensuring more relevant and appealing offers (i.e. a fitness app could offer personalized health insurance plans based on user activity levels).
Embedded finance is fundamentally changing the way businesses interact with their customers, offering unparalleled flexibility, competitive advantages, and enhanced user experiences. By embracing this trend, companies can not only meet the evolving needs of their customers but also unlock new growth opportunities.

Implementing Embedded Finance Offerings: A Step-by-Step Guide

So you’re ready to dive into the world of embedded finance and reap its numerous benefits… now what? Here are some tips to help you navigate the implementation process, from assessing business needs to choosing the right technology partner and executing a seamless integration.
Step 1: Assess Your Business Needs
  • Market Research: Conduct thorough market research to understand what exactly your customers need and what the market demands. Do your customers need more flexible payment options? Faster access to loans or insurance? Identifying precise needs will help you tailor your embedded finance offerings more effectively.
  • Internal Assessment: Take a close look at the existing capabilities you have within your business. What financial services do you already offer and what are the gaps? Conducting an internal analysis will help you determine what additional resources or technologies you need in order to successfully implement your embedded finance offering. Make sure you’re aware of strengths and weaknesses to create a more robust integration plan.
  • Define Objectives: Clearly outline what you aim to achieve with your embedded finance implementation, such as increased sales or improved customer retention.
Step 2: Choose the Right Technology Partner(s)
  • Determine Criteria for Selection: Selecting the right technology partner to set you on your embedded finance path is critical. Consider factors like:
  • Scalability: Ensure the decisioning platform you choose can grow with your business and handle increasing volumes or added complexity.
  • Security: Choose a partner with strong security measures and robust data privacy to protect customer data and financial transactions.
  • Integration Capabilities: The technology should easily integrate with your existing systems and platforms.
  • Case Studies: Look at previous examples of successful embedded finance partnerships – can your chosen tech partner offer the same seamless integration and robust experience for your customers?
Step 3: Implement Your Embedded Finance Plan
  • Develop a Roadmap: Create a detailed roadmap outlining each phase of the implementation process, including timelines, key milestones, and resources required.
  • Build a Pilot Program: Start with a pilot program to test the integration on a smaller scale and gather feedback.
  • Full Integration: Roll out the solution across your entire platform, ensuring all systems are integrated and functioning smoothly.
  • Monitor and Optimize: Continuously monitor the performance of your embedded finance offerings and make necessary adjustments to optimize the experience.

Tackling Embedded Finance Hurdles

Yes, the benefits of embedded finance are substantial. But that doesn’t mean it doesn’t come with its own set of challenges. Here are some common hurdles and the strategies to overcome them.
  • Regulatory Compliance: Navigating the complex landscape of financial regulations is most definitely daunting. Different countries and regions have varying rules and regulations governing financial services, all of which can impact how you implement and maintain embedded finance. Ensuring compliance is essential to avoiding legal issues and potential fines.

    • Stay Informed: Keep up-to-date with the latest financial regulations in the regions you operate in and be sure to engage with legal experts to understand all of the implications for your business.
    • Develop Compliance Programs: Implement comprehensive compliance programs to ensure all of your financial activities adequately meet regulatory requirements, and conduct regulator reviews and audits to maintain compliance.
    • Partner With Experts: Collaborate with financial services providers who have a strong understanding of the regulatory landscape in your region so you can navigate complex regulations more effectively.
  • Technological Integration: Integrating financial services into your existing systems can be technically challenging, requiring robust IT infrastructure, seamless data flows, and compatibility with your current platforms. And ensuring data security during integration is critical for protecting sensitive customer information.

    • Ensure Robust Infrastructure: Invest in a robust IT infrastructure that can handle the integration of financial services. This includes everything from scalable servers and secure data storage to reliable network systems.
    • Utilize API Integration: Use APIs (Application Programming Interfaces) for seamless integrations. APIs can facilitate data exchanges between your systems and financial services providers, ensuring smooth operations for your customers.
    • Implement Proper Security Measures: Utilize advanced security measures, including encryption, two-factor authentication, and regular security audits to adequately protect customer data both during and after the integration process.
  • Customer Trust: Building and maintaining the trust and loyalty of your customers is critical when you’re offering financial services of any kind. Customers need to feel confident that their data (including identity, account numbers, and transactional data) is secure and that services provided are reliable. Any incidents that breach this trust can have severe repercussions for your brand (and your bottom line).

    • Be Transparent: Be upfront and straightforward with your customers about how their data is used and the measures you have in place to protect it.
    • Provide Customer Support: Ensure you have robust customer support in place to address any concerns or issues your customers may have regarding your embedded services.
    • Perform Quality Assurance: Regularly test and update your financial services to ensure they remain reliable and secure. High-quality service delivery enhances customer trust and satisfaction.
Implementing embedded finance can transform your business, but it’s crucial to address any potential challenges head-on – and preferably before they pop up! Stay informed, invest in the right tech, and build trust with your customers so you can navigate these obstacles with ease and ensure a successful embedded finance integration.

The Future of Embedded Finance: What Lies Ahead?

As embedded finance offerings (and the tech behind them) continues to grow, the impact on various industries are becoming more profound – with trends surrounding embedded finance shifting, use cases evolving, and long-term benefits emerging.
  • Increased Use of AI: AI can enhance financial services by providing more personalized and efficient solutions, with everything from AI-driven chatbots offering instant customer support and machine learning algorithms that can analyze user to data to offer customized financial products. This level of personalization and rapid response improves customer satisfaction and engagement.
  • Expansion Into New Sectors: Embedded finance has been well-established in sectors like retail and transportation, but that’s only the beginning. Industries including healthcare, education, and real estate are exploring the potential of embedded finance solutions. Healthcare providers could offer financing options for medical treatments directly within their platforms, or educational institutions could integrate payment plans for tuition.
  • Smart Contracts: Self-executing contracts with the terms directly written into the code could make embedded finance even more accessible – automating transactions and reducing the need for intermediaries, making processes faster and more cost-effective. In real estate for example, smart contracts could help automate property sales, ensuring that all conditions are met before the transaction is completed – increasing efficiency and improving fraud screening.
  • Decentralized Finance (DeFI): By leveraging blockchain technology, DeFi enables financial transactions without traditional intermediaries like banks, leading to more decentralized and democratized financial services. This could enable peer-to-peer lending platforms to become more prevalent, allowing individuals to lend and borrow directly from each other, with embedded finance seamlessly facilitating these transactions.
  • Sustainable Growth: Organizations that adopt embedded finance can look forward to sustainable business growth. By integrating financial services, you can create new revenue streams and enhance loyalty of your customers. And offering financing options at the point of sale increases conversion rates and average transaction values, leading to higher revenues overall.
  • Enhanced Customer Loyalty: The convenience and personalization offered by embedded finance can significantly enhance customer loyalty. Access to tailored financial solutions, easily and securely, means your customers are more likely to return and recommend your services to others, resulting in a strong customer base and competitive advantage in the market.
  • Operational Efficiency: Automating various financial processes allows you to streamline operations, reducing the need for manual intervention, minimizing errors, and speeding up transaction times – leading to lower operational costs and greater efficiency. And reducing the time and resources spent on managing things that are now automated means more focus on core activities or strategic innovation.
Emerging trends and new innovations are set to further enhance the impact of embedded finance, making the future runway of opportunity long and bright. The benefits of embedded finance are clear (sustainable growth, improved customer loyalty, greater operational efficiency) – now all you need to do is ensure you have the right technology partners along for the ride.

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On-Demand: Navigating the Future: Unveiling the Keys to Successful Digital Transformation in Financial Services

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Navigating the Future:
Unveiling the Keys to Successful Digital Transformation in Financial Services

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In the dynamic landscape of the financial services industry, digital transformation has become imperative for organisations seeking to thrive in the digital age. We explore the essential keys to achieving a successful digital transformation journey within the financial services sector.

Leading industry experts will delve into the intricacies of this transformative process, addressing key challenges and providing actionable insights to guide financial institutions towards a digitally empowered future.

Key takeaways from the live discussion: 

  • How digitalisation is impacting financial services and how these institutions are being fundamentally challenged to keep up in today’s increasingly digitally focused market
  • Strategies for aligning organisational goals with digital objectives to foster a culture of innovation
  • The importance of placing customers at the centre of digital transformation efforts
  • Learn how to leverage customer insights, data analytics, and personalised experiences to enhance overall satisfaction and loyalty
  • Gain insights into building a robust technological infrastructure that supports scalability, agility, and seamless integration
  • Discuss best practices for continuous monitoring, evaluation, and adaptation in the digital era

Embark on a successful digital transformation journey, to ensure sustained growth and competitiveness in an ever-evolving landscape.

Speakers:

  • Peer Timo Andersen-Ulven

    Head of Analytics, Avida 

  • Keshnie July

    Credit Risk Practitioner

  • Jun Wai Des Lee

    Principal Consultant, Provenir

Moderator:

Adrian Pillay

VP-Sales, MEA & Turkey, Provenir


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Provenir and tbi bank Recognized for “Best in Digital Lending Implementation” in the IBSi NeoChallenger Bank Awards 2023

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Provenir and tbi bank Recognized
for “Best in Digital Lending Implementation” in the IBSi NeoChallenger Bank Awards 2023

tbi bank offers clients credit decisions in real-time at scale via Provenir’s AI-Powered Risk Decisioning Platform

Parsippany, NJ November 29, 2023 – Provenir, a global leader in AI-powered risk decisioning software, along with customer tbi bank, a mobile-first challenger bank in Southeast Europe, have together been named winners of a IBSi NeoChallenger Bank Award for “Best in Digital Lending Implementation.”

The IBSi NeoChallenger Bank Awards recognize successful technology project implementations at neobanks, challenger banks, and digital arms of traditional banks and the impact these programs have had on improving customer experience.

tbi bank built a credit decisioning center of excellence using Provenir’s AI-Powered Risk Decisioning Platform to bring risk decisioning, data and AI capabilities together to enable more accurate credit decisions in real-time, with the flexibility to iterate, expand, and scale on a global level, without extensive IT resources.

Provenir’s AI-Powered Risk Decisioning Platform is a single, comprehensive cloud-based solution that unifies all risk decisioning, data, and AI through a centralized user interface, letting organizations bypass patchwork APIs and hardcoding for shorter development lifecycles and faster time-to-market.

By leveraging cutting-edge technology to revolutionize lending processes, tbi bank is now a leading regional innovator in credit assessment automation, performing underwriting quickly and at scale. This has enabled capacity growth from less than 500,000 credit applications to 7 million applications annually – for a 1,400 percent improvement.

“We are pleased to be recognized for this honor along with our esteemed customer tbi bank who is providing faster and more accurate lending, resulting in improved customer experience while also reducing risk,” said Frode Berg, Provenir’s Managing Director for EMEA. “We look forward to continually supporting tbi bank with its credit decisioning needs as it looks to expand its digital business and product offerings for its growing customer base.”

“The partnership between tbi bank and Provenir is a testament to the success achievable through collaborative innovation,” said Nikhil Gokhale, Director – Research & Digital Properties at IBS Intelligence. “By combining tbi bank’s customer-centric focus with Provenir’s advanced risk decisioning capabilities, they have achieved a significant improvement in their underwriting capability and compliance. I would like to congratulate Provenir and tbi bank for their win in the category,‘NeoChallenger Bank Awards – Best in Digital Lending Implementation.’” 

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Watch Now: Trends in Digital Lending for 2024

ON-DEMAND WEBINAR

Watch Now:
Trends in Digital Lending for 2024

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AI, Automation, Embedded Finance and More

As we begin to look to 2024, we can expect new technology to continue to have a profound impact on digital lending. While there have been some challenges for lenders given the difficult economic environment it is more important than ever to understand the trends that will drive the industry forward in 2024. Check out this on-demand webinar featuring a panel of leading experts discussing some of the major trends on the horizon next year.

Key Highlights Include: 

  • Why AI/ML models will become more important and how to deploy them quickly 
  • How open banking can help drive underwriting efficiencies 
  • How innovative lenders are using automation in their credit decisions 
  • What new opportunities are provided by embedded lending 
  • How to incorporate ESG best practices into digital lending 
  • How to win in a challenging credit environment 
  • The new tools that are available for fighting rampant fraud 
  • How to navigate the new normal of high cost of capital

Speakers:

  • Louis Garner

    VP, Client Success EMEA, Provenir

  • Christoph Rieche

    Co-Founder & CEO, iwoca

  • Rod Lockhart

    CEO, lendinvest

  • Valentina Kristensen

    Director, Growth & Communications, OakNorth

  • Peter Renton

    Chairman & Co-Founder, Fintech Nexus


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TDS Mini: Level Up Your Digital Lending (In Under 10 Minutes)

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TDS Mini:
Level Up Your Digital Lending (In Under 10 Minutes)

Want to learn how to provide frictionless lending experiences while boosting risk mitigation in under 10 minutes?

Then this TDS Mini is for you! Listen in on highlights from a discussion between lending experts from Provenir, SEON, DivideBuy, and ID Finance for real-world strategies and lessons on leveling up your digital lending. 

Listen to the full conversation here.

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Tune into our Podcast on Apple or Spotify by clicking the icons below.

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Featuring:

  • Corinne Lleti

    GM, Southern Europe
    Provenir

  • Gergő Varga

    Product Evangelist
    SEON

  • Teresa Byrne

    CCO
    DivideBuy

  • Evgenia Ageykina

    CRO, Spain
    ID Finance


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The Lending Revolution: Building World-Class Digital Lending Experiences in Southeast Asia

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The Lending Revolution:
Building World-Class Digital Lending Experiences in Southeast Asia

Digital lending has the potential to revolutionize financial inclusion in Asia’s emerging economies. For individuals and small businesses in the region, accessing credit has traditionally been a daunting, time-consuming process, often resulting in high rejection rates and limited options. 

However, with the arrival of digital lending, the process has become faster, more efficient, and more accessible, offering a world of opportunities for those previously excluded from formal financial systems. Digital lending offers faster decision-making, better risk assessment, and more customized product features. By accessing real-time data, lenders can make faster credit decisions, which leads to faster disbursements and better customer experiences. 

Aditya Chintawar is the Chief Product Officer at KoinWorks, an SME-focused neobank that helps customers build credit scores to solve the problem of accessing credit in Indonesia. With a population of over 270 million people that are largely unbanked or underbanked, a report by McKinsey & Company estimates that the economic impact of digitization would be a $150 billion or 10% of GDP growth. By leveraging digital platforms and technologies, lenders can reach a wider customer base, which can help drive economic growth and development. Aditya recently spoke to Provenir’s General Manager for APAC, Bharath Vellore about their experience building world-class digital lending experiences tailored to this market. Check out some of the key takeaways from the discussion. 

Digitization vs. Automation: Understand the Difference and the Path to Follow

Digitization and automation are not the same! Step one to digital lending is effective digitization: the process of transforming analog or manual processes in lending into digital ones. This involves the use of digital technologies such as Optical Character Recognition (OCR), data analytics, machine learning algorithms, and digital platforms to improve operational efficiency, enhance customer experiences, and expand reach to underserved segments of the population. By taking a written statement on a new lender, digitizing it and inserting it into your data lake, you enrich the quality of your models and open the doors for new customers with no previous credit histories. Digitization allows lenders to access data in real time to make faster credit decisions, and provide more customized and personalized products to their customers. Digitization is a key factor in transforming the lending industry and enabling lenders to compete in today’s rapidly evolving market and provide more customized products to their customers.

Once a process has been digitized effectively, it can then be automated. Manual to digital to automation is the path to follow, and it is essential to understand what is being digitized to ensure it is effective. Digitalization unlocks additional data points, making it easier to build better products, perform better risk assessments, and provide better customer experiences. Understanding lending behavior through key data points is critical, and the development of any digital lending product should take this into account. In terms of client experience, the customer response to digitalization has been great, and certain forms of face-to-face interaction can still be maintained, such as voice KYC or video calls.

Balancing Inward and Outward Focus

To digitize effectively and launch new digital products, lenders must balance inward and outward focus. Inward focus requires proper digitalization – adapting operational processes such as underwriting so they can be done by computer systems – in order to reduce friction, make credit underwriting faster, and provide insights into risk assessments. However, properly executed digitization must also happen on the operational level for the availability of services to be possible. A step-by-step approach ensures that each aspect of the process is able to handle the previous load, ultimately ensuring that the availability of service is on-demand, 24×7. Many digital lending products are launched with an outward focus on great front-ends designed for great user experiences. Koinworks operates in a setting where the average smartphone has 4GB of RAM and 64GB of storage. To be relevant to users, the app needs to have a small footprint and be easy to use. The app also offers a dedicated support team to help users with their loan applications and other needs. But if the back-end cannot function up to speed, it will lead to client frustration. Providing ongoing analysis of user behavior can help identify cross-selling opportunities and increase loan limits for existing customers. So, when it comes to inward or outward development focus, it’s an issue of building an agile, end-to-end infrastructure, to strike a balance between the two and launch as quickly as possible. 

The Challenges of Retention in Digital Lending

Retention in digital lending is challenging. Strategies for reducing rejection and anxiety include defining trust and critical parameters with the business to avoid fraud and risk, and maintaining effective communication with the client. Lending is a complicated business, and testing underwriting systems takes time, so running multiple programs on smaller budgets to identify which product works is essential for each type of customer is essential. Additionally, the focus should be on creating a seamless customer experience, reducing friction, and taking into account customers’ digital footprint.

The lack of trust in emerging economies where financial inclusion plays a huge role, has a significant impact on decision-making and strategy. Building trust and infrastructure is essential for the success of digital lending in these markets. Scalability and agility are also important, as they allow lenders to adjust their offerings to meet changing customer needs. Fintechs should focus on agility when building product features to respond to changing market needs quickly. Finally, being open to new ideas and defining trust and infrastructure will help fintechs succeed in a rapidly evolving environment. That’s why digital lending becomes, not just a nice-to-have, but a must-have in order to compete on quality and time-to-market.

“The goal is to create a virtuous cycle. Better data leads to better risk assessment, which leads to better products and experiences. All of which, in turn, lead to better data.”

– Aditya Chintawar, Chief Product Officer at KoinWorks

Digital lending is transforming the lending industry in Southeast Asia and around the world. By leveraging digital technologies and data, lenders can improve their operational efficiency, enhance customer experiences, and expand their reach to underserved segments of the population. However, to succeed in these markets, lenders must balance inward and outward focus, understand the difference between digitalization and automation, address challenges related to retention, and build trust and infrastructure.

Watch the full fireside chat with Bharath and Aditya to learn more.

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Times of India: The Future of Lending

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Times of India:
The Future of Lending

For too long, the lending industry has struggled with inefficiencies and long delays, resulting in a less than satisfactory experience for customers. In this Times of India article, Varun Bhalla, Country Manager for Provenir, shares how AI and machine learning are changing the lending landscape, helping businesses make more accurate, faster risk assessments, support financial inclusion, detect and prevent fraud, and improve customer satisfaction, loyalty and retention.

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