Strategies to protect, build and grow

ADVANCE.AI's solution and product offerings have always been developed to support the needs for financial service providers and their end-customers which are really the population at large. Right now, we understand the stronger need for these businesses as they take a longer term approach especially towards customer retention as companies protect, build and grow.

More reactive organisations may focus on protection, i.e., how to secure status quo and not lose revenues. For institutions that are more proactive and are planning for a longer term, this is really a time to build. You can probably expect them to have various workstreams towards this end. In this very dynamic environment, it is critical to understand the disproportionately large opportunity cost of just maintaining the status quo – as history shows us in the boom and bust cycles of decades past.

BSP Circular No.1140 advises banking and financial service institutions (BFSIs) to implement automated and real-time fraud monitoring and detection systems.

Policy-wise, the need for protection is also apparent especially as consumers' online transactions increase. The Bangko Sentral ng Pilipinas (BSP) Circular No. 1140 for example, on fraud monitoring aims to protect businesses and consumers from fraud. The circular advises banking and financial service institutions (BFSIs) to implement automated and real-time fraud monitoring and detection systems to block suspicious and fraudulent online transactions – something that ADVANCE.AI is already supporting many BFSIs. In our commitment to uplift the unbanked and underbanked population in the Philippines, protection – along with customer awareness and education – is key.

While a good part of our population has gotten started with digital wallets, e-payments and online transactions during the pandemic, we still have a long way to go before the online behavior and awareness of the associated risks become part of our lives.

Most consumers have really only enrolled and are using the basic e-wallet facilities. Many haven't been able to use these digital tools to its full potential because traditional methods of scoring customers are still keeping them out of the financial system. To properly grant financial access and financial inclusion, we need to look at novel ways to provide credit scores. Because as companies brace themselves for the challenges ahead, it's important to make sure the population is also well guarded while they access the financial system. What are some tools that BFSIs can consider to score customers, for example, to offer micro and small loans whether for personal or business use?

Catering to consumers' needs through alternative data

One good tool as an alternative to traditional means is e-commerce data. At ADVANCE.AI, e-commerce data helps our customer brands better understand consumers not just in terms of their buying habits, but also their abilities to pay, repurchase, and have addresses where their orders can be sent to whether they are work or residential addresses.

Besides e-commerce data, ADVANCE.AI also taps into alternatives such as payment history data, multiplatform data as well as email, telco behaviours and telestatus checks. All these data insights when combined become a much powerful indicator of one’s credit-worthiness.

E-commerce data, payment history data, multiplatform data as well as email, telco behaviours, telestatus checks and other data insights when combined become a powerful indictor of one's credit-worthiness.

Many digital banks and fintechs that we speak with understand the importance of looking beyond the traditional gamut of tools, especially when catering to the needs of digitally savvy young Filipinos. It's also essential for large banks to consider the new digital needs too, during this time of protection and growth.

Some large traditional banks already have a majority market share of the banked population, or are part of prominent conglomerates, giving them a captive market. And from that standpoint, customer-centric innovation may not be priority.

Given this, digital transformation has been forced to take a backseat, that is, until the pandemic and priorities had to quickly switch. We have seen for ourselves: for years, many in the banking and financial services industry have been talking about how digital transformation will improve customer experience, how tech can make banking a lot more seamless. Yet, when it comes to expansion, digitisation isn't always the first thing to do.

Ensuring seamless customer experiences and retention

The challenge now is that, as things go back to normal, how organisations choose between building more branches or building tech that enables better experiences at scale. How can organisations approach protect, build and grow strategies with the goal of providing more seamless experiences? Because as we have seen in so many use cases, seamless experiences are a key factor in creating brand stickiness and customer retention.

Many of our BFSI customers shared with us on the efficacy of our eKYC and AML solution, and how having ADVANCE.AI as a verification tech partner has been helpful in ensuring secure and quick onboarding as companies roll out promotions and special programmes as part of their strategies to attract new sign-ups.

With the right data, ADVANCE.AI is able to help brands better understand their end-customers. And in turn, help create lasting loyalty through various ways including reducing friction while adding on services.

Now, with our evolving suite of data solutions including alternative credit scoring tools, we are also working with these companies to provide longer term retention strategies so consumers don't just sign up because they can enjoy an initial high interest rate on their savings accounts, for example.

With the right data, we are able to help brands better understand their end-customers. And in turn, help them create lasting loyalty through various ways including reducing friction while adding on services, supporting consumers' aspirations with financial products that fit their lifestyles and goals.

It is also for good reason that the BSP Circular No. 1140 is advising companies to integrate with systems that cover all online channels, as consumers' demands for seamless experiences across channels increase, whether they happen on self-help kiosks, point-of-sale (POS), ATM, e-commerce websites, etc. Better yet, ADVANCE.AI weeds out bad actors at the point of onboarding with our anti-money laundering (AML) checks and with continual transaction monitoring, so we constantly keep fraud at bay.

BFSIs will need to share their plans of action starting September 1, 2022, and comply with forgoing guidelines in the circular from December 31, 2022. My team and I are already in talks with several of our BFSI customers on our solution for Filipino companies moving forward; I'm keen to help you find a solution for your organisation, so be sure to contact us for an in-depth discussion.

It's key for companies to firstly align with regulations, and adopt strategies that are informed by consumers' needs and behaviours. As the adage goes: the customer is always right. Whether organisations are protecting, building and growing during this time, the needs of consumers or end-customers will provide direction as to where organisations are heading. And with that, businesses can perhaps move even quicker and further ahead.

ICYMI, Mike previously shared on the Philippines' hypergrowth and hyperprotection.