UBX,
the leading open finance platform in the Philippines, has forged a strategic
partnership with Aboitiz Data Innovation (ADI) to integrate artificial
intelligence (AI) solutions in its lending platform SeekCap.
During
the inaugural AI Summit PH 2023, UBX and ADI signed a partnership agreement to
champion financial inclusion and sustainability through innovation and
technology.
The
partnership is a testament to how UBX and ADI embrace innovation and technology
by unlocking cross-ecosystem opportunities, while ensuring compliance with data
privacy and security policies.
Currently,
UBX and Union Bank of the Philippines leverage an AI-powered alternative credit
scoring solution, making it possible for them to offer loans to a broader range
of individuals and small businesses who may not have qualified under
traditional scoring methods.
“We
identified a few years ago that the MSME segment is a big opening, since many
of them are very underserved. A lot of these businesses don't even have bank
accounts, hence scoring them would be a challenge. By using alternative data,
we are able to appropriately determine the credit score of MSMEs, allowing us
to extend credit to those who couldn’t get it and give it to them at better
rates,” UBX President John Januszczak said.
According
to the Department of Trade and Industry (DTI), MSMEs accounted for 99.51
percent of businesses in the country in 2020. However, the latest data from the
Bangko Sentral ng Pilipinas (BSP) showed that loans disbursed to MSMEs only
reached P454.31 billion from January to September 2022, representing only 4.91
percent in compliance ratio, which is still below the 10-percent threshold
under the Republic Act No. 6977 or the Magna Carta for MSMEs.
“Through
our partnership with ADI – an APAC leader in data science and AI innovation – we
are able to improve SeekCap’s services and provide democratized access to
business financing to smaller businesses,” Januszczak said.
Aside
from the alternative credit scoring capability, the partnership also paved the
way for the introduction of SeekCap PortfolioPro, a new AI-powered service that
streamlines the process of building a borrower portfolio.
PortfolioPro
enables partner lenders to grow their borrower portfolio at scale with scored
and qualified leads that meet their preferences. This will enable the platform’s
lenders to grant loans with greater confidence and finetune their risk
appetite. More importantly, it will benefit a broader range of individuals and
small businesses to qualify for a loan from an expanded pool of the lending
community, all while improving customer experience by reducing friction. The
new AI-powered credit scoring solution also filters fraud, confirming
identities at a 99.99-percent confidence rate.
“This
is an exciting partnership for ADI and UBX as we drive more informed lending
practices at scale through the SeekCap platform by empowering lenders to better
understand the credit potential of applicants as well as enabling by extension
more freedom of choice and inclusion for borrowers from all backgrounds. AI can
supplement existing lending practices and offer a different lens to drive
data-driven decision-making,” said Guy Sheppard, Aboitiz Data Innovation Chief
Operating Officer for Financial Services.
PortfolioPro
follows a six-step filtration process that is highly effective in determining
the best qualified businesses for each portfolio, ensuring added security when
lending out to potential borrowers. At the onset, the borrower is validated
through SeekCap Credit Risk Filters, enabling the lender to look into each
potential debtor’s credit history with Philippine banking and microlending
data.
Ultimately,
after being presented with a comprehensive report on the borrower’s background,
AI is then utilized to analyze and assess the borrower’s creditworthiness.
Aside
from quickly matching borrowers and lenders, SeekCap lenders may also
streamline their loan collections via UBX’s payment platform, BUx.
“The
main thrust of SeekCap has always been to build a bridge between borrowers and
lenders. With open finance, the accessibility of data is geared towards the
benefit of the consumer, not just the institution which collects it. Consent is
at the heart of our operations,” Januszczak said.
Since
May 2023, SeekCap has processed more than P26 billion in loans from over 65,000
MSMEs. With the partnership with ADI, UBX expects this to tread on a growth
path, reaching more entrepreneurs and growing businesses in the Philippines.
“Every
milestone we achieve in SeekCap is a step closer towards financial inclusion,
particularly for MSMEs who are the main stakeholders in loan accessibility in
the Philippines. We hope to bring in more partners in the future and activate
more channels to continue bringing in the best services to more borrowers
across the archipelago,” Januszczak said.
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