It’s obvious to me that the existing banking rules leave a huge part of the population with no bank accounts or credit rates outside of lending and other financial services. Meanwhile, the unbanked people are a promising target audience that includes about 2 billion people all over the world, with a high demand for loans, mortgages, bank accounts, bank cards, deposits, ready to be involved and eager to start consumption in order to improve their lives. I know it for sure because of our company MicroMoney, a global fintech blockchain project and a lending services provider, works with them very closely for the last 2 years. Instead of banks we are providing them with services they want and are seeing how profitable and far-reaching they are.
No doubts that banks have to secure themselves but this way they are forced to cancel financial services availability for people who cannot confirm their creditworthiness. The risks are too high so banks lose the part of their target clients and possible margins. The main problem the emerging markets face now is how to find the tool to convert unbanked into banked that will satisfy both sides.
And, probably, we discovered it in mobile and neural networks technologies. MicroMoney has found a way to turn a common mobile phone into an accurate system which can provide much more confidential and full information about the clients than they would do themselves. MicroMoney helps the unbanked people in South-East Asia to be included in the financial system and assesses the potential client’s score rate by relying on data collected from the mobile phone. So a customer receives not only a loan application for completing, followed by approval on a mobile app within several minutes but also his or her first credit rate ever to apply even for traditional banking services now.
From a lender’s side, the process is as follows: the Big Data platform gathers all the data received from the phone, processes them through neural networks, analyses the result and approves or disapproves the loan automatically. However, the most interesting thing for banks, financial and insurance companies is that a client may allow sharing his or her data with these companies. In this case, the business gains the database of reliable, already accessed customers, ready to receive offers and to use the services suggested. How do we know it? Each of our clients took 4.5 loans average, and 7% of borrowers got more than ten loans with us. The conversion of the first loan into the second one is quite high – 73%, so, yes, we are sure they are ready and even eager for offers helping them to live better.
Despite the fact that MicroMoney is a successful and mature business, the company’s mission to fight against financial exclusion for the unbanked is essentially charitable, since it allows 2 billion of people all over the world to receive medical aid and education and to improve their lives. I hope our company is a showcase reflecting how businesses staying profitable can help others.