As part of this year’s Singapore Fintech Festival, John Warren, General Manager APAC, is featured in the event’s special edition supplement; Asia’s Digital Ecosystem. John discusses the importance of rich alternative data, insight, and intelligent decisioning in a region that is tackling the challenge of financial inclusion.
Read John’s article below or access the full publication (page 18) here: The Fintech Times Presents Asia's Digital Ecosystem
Published December 7th, 2020 by The Fintech Times, in association with The Asian Banker
Data Drives Decisions
Credit decisioning that adopts alternative data sources is crucial for financial inclusion, says John Warren as he expands Provenir’s footprint across the Asia-Pacific region
Research by the World Bank suggests more than a billion people in Asia lack access to mainstream financial services. Only 27 per cent of adults have a bank account, and only 33 per cent of firms have a loan or line of credit. For Provenir, the industry leading technology company that works on risk decisioning solutions for fintech and global financial institutions, it's a challenge that it's keen to address.
“You can't just ignore 1.8 billion people who don't have a bank account,” says John Warren, Provenir’s general manager for the Asia Pacific region. “In Asia, we're talking about the largest geographic region of unbanked, unrecorded people in the world. There are many countries that make up Asia where over 70 per cent of the population don’t even have a bank account.”
“So much of the credit scoring globally in mature regions relies on your bank account details or having a bank account. If you don't have that but you still need to service that market, not just from a business perspective, but from a political national perspective, you've got to find another way of doing it.”
Traditionally, credit scores have been based on bureau data to inform debtors of the likelihood of someone repaying a loan – from existing loans, credit limits, debt repayments and account status, credit inquiries and information from public records relating to bankruptcies.
Yet alternative data from alternative sources of measuring people has proven essential for regions like Asia. Provenir suggests new data and in-depth analytics can help financial institutions extend services to unbanked and underbanked populations and create truly personalised products and pricing for customers.
“Take a look at the number of bank accounts you've got in countries versus number of smartphones, for example, in the Philippines about 27 per cent of the population has a bank account yet 87 per cent of the population has a smartphone or a phone of some kind. “The alternative data sources, the telco in that instance, can provide a far richer history and a far greater reach into the population of the country than a traditional bureau. There is certainly an acceptance that there are ways to generate scores or rankings of people without having the traditional bureau.
“This approach has driven our business at Provenir. Having an agnostic view of data, we are able to imbibe any of this data, whether it's a bureau and the telco or even psychometric scoring or behavioural-based scoring bringing that together. It may be in the lending or the credit side of the business that these people never end up with a bank account.”
Warren joined Provenir earlier this year to drive its presence in Asia – just as the coronavirus pandemic took grip and global lockdowns and remote working became the norm. Prior to that, he worked at financial technology companies, including Temenos, FIS and SunGard, gaining invaluable experience in the areas of risk management, decision analytics, and business intelligence.
“I joined the organisation just as Covid-19 hit and I’ve managed to work remotely as Provenir responded fantastically to the challenges that we've had during the pandemic. “For me, it has been pleasing throughout this year to have conversations with clients to find a mindshare and an alignment in thoughts. We have pursued the direction of enabling financial inclusion through alternate data due to the success we've had with clients in the region and they understand that they need to operate in a different data paradigm than they did before.”
In April, GoBear – a Singapore-based fintech focused on improving financial inclusion throughout the ASEAN region – chose the Provenir cloud-based platform to support the demand for simplified, digital-first banking experiences throughout the region. Provenir has also partnered with a global Tier 1 bank in the region for data cloud integration and is set to unveil its first client in Indonesia – a large alternative fintech. “Over here, we are in the epicentre of lending innovation from the challenger banks and the NEO banks, as well as the fintech lenders. The most impressive thing about the adoption of cloud here is just the speed with which people have been able to utilise the cloud technology to come up with solutions,” says Warren.
“Provenir is completely cloud native and cloud agnostic which for me is also tremendously exciting as we’re at the bleeding edge of most things. We power an awful lot of the credit decisions around credit card issuance delivering instant decisioning in milliseconds.” According to Provenir, its software processes more than one billion transaction decisions per year for a variety of global clients across buy-now-pay-later, payments, SME, consumer and auto finance – from startup fintechs to Tier 1 banks. Single clients can make millions of decisions a year on a global basis, running batch processes on millions of users in only a few hours, and with greater insight than previously.
"Our insight cloud offering means we are able to analyse data in almost real time and provide feedback on exactly how your models are performing across any risk decisioning process. We're not limited to the type or the underlying architecture or whether it's an internal and external model. We want to make a difference to people’s lives," Warren says. "While we are not lending the money, we are making sure that anybody and everybody has the potential to have access to money, whether it’s a payday loan or a $5 telco top-up when a guy's starting his ride-hailing morning on his scooter, so that’s a nice place to be. Our aim is to facilitate lenders with the ability to lend money to as many individuals as possible, in a responsible way."