FE Credit captures consumer finance market via disruptive tech

Vietnam is a progressive nation in Southeast Asia with one of the highest GDP growth rates today. The government and central bank have a stated agenda to digitise the economy, reduce cash transactions, and move towards a cashless economy.

Growth factors like the rise in household consumption expenditure pose a VND1 quadrillion ($43.48 billion) opportunity in the consumer lending market. This has attracted several players into the market and neighbouring economies to start or diversify into consumer lending.

On the other side was an untapped market in the insurance space which presented a lucrative opportunity to digitally-driven consumer finance players to enter Vietnam.

How FE Credit became the front-runner to steal the game away from competitors

FE Credit, originally founded as the consumer finance division of privately-held Vietnam Prosperity Bank (VP Bank), established a solid foundation to become the market leader of the unsecured consumer loans and credit cards market.

Since inception, FE Credit strived to deliver unique financial products to customers. It identified the gap between the needs of new-age customers and available financial products, and decided to bridge this gap.

The market conditions were in favour of a digitally-enabled lending solution and FE Credit left no stone unturned to become one of the earliest adopters of innovation. It launched “$NAP” – the first robotic lending mobile application in Vietnam – and “$HIELD” – a smart insurance application to empower its customers and provide a comprehensive solution for all their health insurance needs.

$NAP reduced the turn-around-time (TAT) from 4-5 days to less than 15 minutes for loan disbursals and reduced the insurance policy purchase time significantly to just under a few minutes through $HIELD. FE Credit not only focused on aspects of improving operational efficiencies but also increased customer lifetime value and granted another layer of security through unique insurance products.

FE Credit transformed the consumer lending space through $NAP for which it deployed the following innovations taking a multi-tier approach to stay ahead of competition:

Simplified customer onboarding and enabled STP through smart KYC

FE Credit enabled a straight-through-process (STP) that captured each data-point commencing from application to in-principle approval.

The company implemented a multi-tier approach to enable a hassle-free experience and ensure smarter onboarding. It deployed facial recognition to capture customer details in real time, AI-enabled OCR for ID verification and ensured fool-proof data entry with little room for errors. It also enabled a personalised journey through fingerprint-based one-touch login along with a multilingual keyboard (English and Vietnamese).

Harnessed the power of partner integrations to enable a powerful API ecosystem

To assess the creditworthiness of a customer, FE Credit integrated with the government credit bureau that has a repository of every citizen’s national ID, his/her salary as well as tax information.

They used electricity bills as surrogate to gauge a customer’s income and repayment capacity and captured details from one of the largest taxi companies to offer pre-approved loans to drivers.

Transformed credit and underwriting process for smarter decisionmaking

To facilitate faster application underwriting, credit assessment was performed in real-time using scores obtained from integrations with credit bureaus as well as by assessing the income tax statements of applicants.

FE Credit created a robust underwriting channel within the system that was compiled to check major aspects of an application with a few sets of parameters established within the system.

Single unified integrated insurance platform to gain customer loyalty

To protect and develop long-term relations with its customers, FE Credit launched the new-age insurance platform “$HIELD” with a vision to provide customised health insurance products and offer the best value for money.

The company identified that the policy purchase process by most insurers was tedious and required extensive documentation. To help customers choose the best health insurance policy, reduce the application processing time and make policy purchase easy, FE Credit launched $HIELD, a smart mobile application that enabled customers to purchase health insurance products and offered special benefits to them.

It was results time and the scoreboard took no one by surprise

FE Credit has always been known for its reputation of being one of the most technology-savvy institutions and after the launch of $NAP, it became the only Vietnamese consumer finance company to be featured in the regional API Exchange.

Awards such as Most Innovative Consumer Finance Brand in Asia 2018 granted by Global Brands Magazine and Best Fintech Solution at the Singapore Fintech Festival 2018 were amongst a few of FE's many accolades.

$NAP and $HIELD created a new competitive challenge for other players, as FE Credit had leapfrogged the consumer lending and insurance space through technological innovation to become the market leader.

The only thing important in the game is SCALE

FE Credit remains the market leader in Vietnam with over 50 per cent of the consumer finance market share and as the pioneer who understands the space, FE Credit not only achieved "accelerated speed to market" by launching $NAP and $HIELD, but also built the platforms on a modern platform that was architected to scale.

The microservices-driven architecture of the systems provides the flexibility to add and manage load, and facilitates control to business users across all operations.

As FE Credit continues to innovate, it has taken initiatives to partner with companies like GoBear, a metasearch engine for financial products to reach a larger audience base, while extending its organic loan portfolio growth.

The capability of the platforms to plug-in new partner integrations, and the ability to scale to new business operations in the dynamic market, with the fortitude to take calculated risks, makes it safe to say that FE Credit will continue to dominate the Vietnamese consumer finance market in the forthcoming time.