Customer experience is new frontier for consumer finance

Digitisation as a competitive edge in consumer finance

Duong Nguyen, leader of Financial Service Organisations and IT Advisory Services at EY Vietnam, once noted that what technology can do to consumer finance companies will go beyond risk management and lending process to emerge as a stand-alone channel to reach out to potential customers who are young and tech-savvy. Given that over 60 per cent of the 94 million population in Vietnam is aged 35 or less, and 54 per cent of these are Internet users, leveraging new technology in the consumer finance market can thus help players expand their network and bolster their competitive advantages over traditional banks, whose strength is based on their physical branch network.

Investment in technology, especially those that help improve procedures, as she stressed, can minimise or eliminate human errors and data loss while enhancing the efficiency of the lending system.

What is more, according to Nguyen, investment in tech will provide consumer finance companies a platform to reach out to remote areas to secure a bigger slice of the market and maintain their growth in the years to come.

By partnering with some of the best fintech companies around the world, FE Credit has exploited disruptive technologies to develop an end-to-end digital lending platform as part of an attempt to help it deliver the best customer experience and achieve its corporate mission of delivering “Fast and Easy Credit.”

According to FE Credit’s chief marketing officer Basker Rangachari, FE Credit realised the importance of digitisation to enhance customer experience, as it updated its 5-year strategy plan during 2017. In early 2018, the FE Credit team decided to deconstruct its existing business model to identify key elements in building credit history or credit profile for the customers to make a decision. The firm then searched for the optimal digital solutions that are available around the world to aid it in constructing a brand-new platform to deliver customer experience, starting from the first contact where the customer touches a sale channel, right through to loan approval, and ongoing servicing of the customer’s loan.

“We essentially deconstructed our existing model, researched, acquired, and deployed the best of digital technologies, and then customised them for our purposes. We built a holistic digital lending platform, which can be considered the most efficient and complete lending platform conducting customer onboarding from end to end,” said the CMO in an interview in Ho Chi Minh City.

“This process requires zero human intervention. Where human intervention is required to support a customer who is facing difficulty in continuing with the lending journey, we provide the right human touch to help complete the journey,” he noted.

Basker Rangachari, FE Credit’s chief marketing officer

Today, technology is transforming the way data is collected and used to improve lending outcomes for both consumers and businesses. This integration of technology within consumer lending has enabled consumer finance companies to re-think their policies to originate a loan and adapt the workflows used to deliver an efficient, frictionless lending experience.

According to FE Credit’s deputy CEO cum sales division director Nguyen Huu Ai, a few years ago the process of applying for personal financing was archaic. Customers required assistance from sales staff and had to manually fill out intimidatingly long paper forms which took up to 30 minutes per customer and could wait weeks for a response – that is, lending was completely irrelevant for the growing e-commerce market.

“At FE Credit, our focus is to digitise the customer journey in order to deliver Fast & Easy services to our customers. With this in mind, we had studied, compared, and evaluated a range of solutions providers to help us enhance customer service and our customer’s satisfaction. For example, we have integrated a sales productivity solution that uses AI technology and process automation in order to improve sales productivity, drive higher conversions among sales teams, reduce loan disbursement time, and improve collections,” said Nguyen Huu Ai.

FE Credit is not alone in its quest to make use of digitisation to enhance customer experience. Some of its rivals like Home Credit, for instance, has also embarked on this journey with its mobile app to help its customers manage their cash loans. The Czech-based consumer finance firm is also set to launch its online cash loan mobile application in the near future.

Lotte Finance, a new Korean player who has just entered Vietnam, has introduced Lotte Card’s Hand Pay, which allows customers to pay using an individual’s distinct vein pattern on the palm as identification to maximise convenience because customers now can pay without cash or physical credit card, or even smartphone.

Cracking the code

On Vietnam Insider, Dr Nguyen Thi Thanh Van from the Banking Academy’s International Business Faculty, has said that orienting the development of digital technology in the sector is essential as technology can facilitate the use and accessibility of financial services.

Ho Thi Nhu Ha, FE Credit’s deputy CEO cum operation division director, added, “The challenge faced by consumer finance companies in Vietnam is rather unique as most of them require physical documents in the lending process and there is currently no centralised digital data available for those paper-based documents. FE Credit’s digital $NAP App successfully overcame this challenge as it utilises Optical Character Recognition (OCR) and Intelligent Character Recognition (ICR) to verify customer’s identity and authenticate documents submitted by customers using their smartphone cameras.”

Ha elaborated that the company is having a good automatic customer screening system and using SMS text alerts without much call, reducing people interaction in the collection process and operation costs. Customers can stay updated with alert services, free-of-charge SMS service which offers the convenience of receiving alerts on customers’ critical account specific events, for instance Payment due, Past due reminder, and Transaction alerts. Customers no longer need to keep track and worry about the little details, as they can get such information easily on-the-go.

Ho Thi Nhu Ha, FE Credit’s deputy CEO cum operation division director

Traditionally, businesses have been relying heavily on credit scores to drive decisions, but very different borrowers who might have been lumped together under the same credit score – say a college graduate with almost no credit history and a borrower with bad credit – can now be identified and offered personalised loans through the application of Big Data. And it is exactly what FE Credit does for their data system in order to quickly identify customers and enhance the accuracy of the underwriting process.

Rangachari further highlighted that $NAP’s selfie-based face recognition, meanwhile, acts as a biometric software for automated credit assessment and enhance the Know Your Customer (KYC) process. It uses applicant’s selfie photos to query their data and process credit assessment accordingly.

FE Credit strives to bring a world-class customer experience and financial inclusion to all Vietnamese consumers

“The customer is at the centre of our universe. We not only launched our digital lending platform, which is only one example of our customer-centricity, we also digitised our human-assisted sales and service channels with digital tools and platforms to drive productivity and enable our front-line staff to make the customer lending experience faster, easier, and better. Bringing a world-class customer experience and financial inclusion to all Vietnamese consumers is our goal and our DNA,” said Basker Rangachari, CMO of FE Credit.