CredoLab Looking to Diversify Clientele

November 20, 2019

This article originally appeared in Business World.

SINGAPORE-BASED financial technology (fintech) player CredoLab is targeting to “diversify” its clientele in the Philippines and offer its data analytics solutions to non-bank firms by next year, a senior official said.

In an interview last week, CredoLab Chief Product Officer Michele Tucci said this will allow firms outside the financial industry to use their software in analyzing customer behavior and match them with insurance and banking products.

Mr. Tucci said that they are bringing this strategy, which it started in Indonesia, to the Philippines to offer their services to other industries housing large databases such as airlines and those in the e-commerce sector.

“So we are looking at diversifying our clientele. You will see large database owners such as a retailer or an airline saving facility to leverage our analytics solution as a service for them. We are not going to simply score customers for credit risk assessment, but analyze customer behaviors and match them with insurance products and banking products so the large database owners can monetize the data,” Mr. Tucci told BusinessWorld in an interview.

“For the company, they get a revenue share from the insurance or banking products, while for the users, they get relevant products at fair prices,” he added.

The Philippines is currently CredoLab’s second-largest market out of its 14 partner-countries, only next to Indonesia. Of the 3.5 million scores CredoLab is expecting to produce this year, he said one million will come from the Philippines alone

To ensure data security and privacy protection, Credolab’s software only accesses the metadata, which Mr. Tucci referred to as “the data about the data,” instead of personally identifiable information (PII) which is the exact personal information of clients.

He said through metadata such as location, frequency, and distribution, among others, they can analyze the customer’s behavior for credit scoring — even for those with no credit history — for risk assessment and detecting fraudulent activities.

So far, the four-year old company is servicing the “top four banks and the largest multi-finance firm in the Philippines,” as well as several banks and lenders.

However, Mr. Tucci emphasized the need for greater financial literacy among Filipinos to further maximize the use of metadata for data security and help them minimize their exposure to fraudulent activities such as the mobile lending applications that use PII to shame their clients online.

In September alone, the Securities and Exchange Commission shut down more than 30 illegal online lenders after it received complaints from victims of debt shaming by these fraudulent lenders.

Mr. Tucci said banks here were “quick” to adopt fintech to integrate in their operations and shift from its traditional know your customer (KYC) approach, but implementation has been slower than expected.

He urged banks to start digitizing to streamline their services since the traditional KYC method “is very manual, labor intensive.”

“The banks realize that they want to partner with fintechs but then it takes time for them to go through the procurement process, integration of the technical solution and then deployment,” he said.