Banking the unbanked using AI data aggregators and insights
Finance - Credit scoring
28%
increased approval rates for new customers within 3 months of deployment
10%
increase in repayment rate
Module used: Digital footprint
Location: Indonesia
Industry: Banking and Financial Services
Challenge
Bank Rakyat Indonesia (BRI), a leading banking institution in Indonesia, aimed to expand its services to the underbanked and unbanked populations, particularly in island regions and tier-two or tier-three cities. Previous attempts by two well-developed BRI branches to pilot this programme had encountered significant hurdles:
· Inconsistent onboarding of reliable, repaying unbanked customers
· Insufficient credit bureau data and poor predictability of defaults
· High Portfolio at Risk (PAR90) and bad debt due to frequent payment defaults
These challenges hindered BRI's ability to serve the ultra-micro segment of the Indonesia population effectively and sustainably.
Solution
InsightGenie proposed a two-pronged approach to address BRI's challenges:
1. Digital Footprint System: This solution aggregated customers' mobile phone data, including social media profiles, internet activity, and other online information, regardless of the phone type. Importantly, only publicly available data or information shared with full consent was used in this process.
2. Comprehensive Risk Assessment System: The aggregated data was then extracted, analysed, and transformed into actionable insights. This system helped the BRI team determine the reliability of individual loan applicants more accurately.
By implementing these solutions, BRI could make more informed decisions about onboarding new customers from previously underserved segments in the Indonesia.
Result
The implementation of InsightGenie's solution yielded impressive results, exceeding BRI's expectations on key performance indicators:
1. Increased Approval Rates Within just three months of deployment, BRI saw a 28% average increase in approval rates for new customers, with continued improvement thereafter.
2. Improved Repayment Rates Initially, the repayment rate for new customers was 4% higher than that of existing clients. Following full implementation, this figure increased by an additional 10%.
3. Expanded Customer Base BRI successfully onboarded and served customers from the ultra-micro segment, a previously challenging market to penetrate in the Indonesia.
Reduced Risk The bank achieved these results whilst simultaneously reducing their exposure to bad debt and defaults, improving overall financial stability.
ABOUT THE CLIENT
One of the most historical and largest banks in Indonesia, Bank Rakyat Indonesia (BRI) offers a diverse range of banking and financial products to individuals and MSMEs (Micro, Small, and Medium Enterprises). For individuals, they offer savings and chequing accounts, personal loans, credit cards, and investment options. While for businesses, especially MSMEs, they provide business loans, microloans, and other tailored financial solutions.
28%
increased approval rates for new customers within 3 months of deployment
10%
increase in repayment rate
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