With steadily increasing numbers of loan/credit facilities and the need for business and personal loans on the rise; banks, credit institutions, hedge funds, etc., are relying much more on customer data to authenticate and approve loan requests.
As a result, reliance on technology to make data driven decisions has become important for financial institutions; said to have processed over $100 billion worth of credit loans for Small and Medium Scale Enerprise (SME) alone.
The Social Media Week panel session organised by SystemSpecs, developers of Remita, an e-payments and e-collections platform, on Thursday, had discussants unanimously agreeing to the fact that everyday people will only be able to access credit easily and seamlessly when there is adequate technology and data to back the process.
Tunde Kehinde, co-founder of Lidya, a company that provides financing to small medium businesses in fast growing economies, said during the panel session that the next phase of lending in Nigeria will be about digital records and so it is very important for loans to always be paid back to build a solid credit history.
“In the next two to three years, there would be millions of credit data points. So if you build a solid credit history, you will be able to dictate your own price an interest rate,” he said.
Speaking after the session, David Okeme, divisional head, payment applications and verticals, SystemSpecs, said the organisation is working towards empowering everyday people to be able to access credit fast to meet their short term needs.
“We have been able to tap into the resources that we have which is data and technology including digital channels, to create a fantastic experience with lending,” he said.
“SystemSpecs started by doing a pilot with a deposit money bank, and today, we have on-boarded hundreds of other small lending organisations to make sure that we push the level of access down the line. We have salary data and that has come from our over 20 years of operation within the whole payroll processing space and the data increases personalisation required for the kind of experience we are talking about, as this helps to determine what will technically be called a credit score,” Okeme explained.
On the ease of gathering credible data sources, Ayotunde Bally, founder and CEO of Arvo Finance, said that it is important for banks, telecommunication operators and other data collectors to share data with fintechs who are there to increase financial inclusion and compliments the work of banks.
“This issue of open banking and openness is only an issue in Nigeria. Transparency and sharing of data is our key issue and not that there is lack of data,” he said.
On what banks are doing to increase digital lending and promote financial inclusion, Esther Oblekwe, business head, digital banking group, Access Bank Lagos, said that Nigerian banks are working towards getting to where they need to be technologically and are therefore engaging technology experts and using digital tools to drive operations.
“Banks are using data and technology everyday to focus more and understand the everyday life of our customers so that we can serve them better. It is quite expensive to lend digitally, but we are making sure that the loans we are giving out are human focused to meet customer needs,” she said.
Oblekwe said that Access bank has gone through a transformation as a business and has brought customers into the centre of their work by using data to bring some sort of personalisation so that decision making is quicker and seamless.
The session which was moderated by Chukwuemeka Fred Agbata, host of TechTrends on Channels Television, ended with panellists agreeing that although data is critical, it is sensitive and should be protected and adequately used.
