Digital and mobile innovations lead the way for tech-enabled consumer lending

PDI and Philstar | Tuesday, Jan 18, 2016 | Material #2

Innovations in digital and mobile technology are quickly changing the banking industry as customers are demanding “anytime, anywhere convenience” especially for the rapidly growing consumer loan market.

The Morgan Stanley Research Global study entitled “Global Marketplace Lending: Disruptive Innovation in Financials” published last May 2015 cited that “marketplace lending is in lift off” and the market could exceed US$490 billion by 2020.

In the Philippines, the Bangko Sentral ng Pilipinas (BSP) reported an almost 20 percent increase in consumer loans for the second quarter of 2015, reaching P959.2 billion as compared to the same period in 2014. This robust growth has been sustained since 2008.

“We see that this growth will be further propelled by the shift in digital behavior, with more customers accessing banking services using mobile and online channels,” said Lito Villanueva, Vice President and Head of Financial Innovations, Digital Inclusion and Alliances at Voyager Innovations.

Locally, banks and financial institutions are recognizing this need to ride the wave of financial technology or “fintech” innovations. Both the Rural Bankers Association of the Philippines (RBAP) and the Chamber of Thrift Banks (CTB) have signed Collaboration Agreement to promote Lendr across its member banks. RBAP and CTB respectively have 499 member-rural banks and 54 member-thrift banks.

Lendr is a fully digital, multi-channel, telco and bank agnostic platform that financial institutions and credit providers can use to reach consumers planning to avail themselves of loans through a single online “marketplace”, which marketplace is dubbed as the “uber” for consumer loans.  Lendr has currently been adopted by Asian United Bank, China Bank Savings,  Malayan Savings Bank, RCBC Savings Bank, and over 15 rural banks.

For financial institutions, Lendr is helping digitize and optimize the reach of banks. At the same time, the platform aims to empower customers who want to avail of consumer loans to make informed decisions regarding interest rates and other requirements just by checking out Lendr via their mobile phones. Any interested mobile subscriber will be able to register to have a unique Lendr account via SMS, mobile app or online.

For bank and financial institution partners under Lendr, PLDT Smart Alpha Enterprise and SME Nation, are offering the widest range of connectivity solutions that include fixed and wireless data access bundled with the latest devices and gadgets to help small businesses and enterprise clients harness technology to make their businesses relevant and stand out amid the competition.

“Fintech is a strong driver in enabling financial inclusion for the country and we are excited to be at the forefront of this arena together with our partners,” said PLDT, Smart and Voyager Innovations Chairman Manuel V. Pangilinan.

“There’s no way back in terms of where the market is going even for the banking and finance sector – it is now a mobile-first and digital arena. We’re collaborating with banks and other financial institutions because the best initiatives in the fintech space are brought on by combining our respective areas of expertise,” said Orlando B. Vea, president and CEO of Voyager Innovations.

“PLDT Smart Alpha Enterprise and SME Nation are committed in enabling the digital infrastructure so banks and financial institutions as well as their customers can fully maximize the benefits of this fintech innovation. Our connectivity solutions will allow them to more effectively respond to the market needs for Lendr,” said Eric R. Alberto, PLDT Executive Vice President and head of PLDT Smart Alpha Enterprise and SME Nation.

Lendr is expected to change the landscape for consumer loan lending not only in the Philippines but also in key growth and emerging markets through this marketplace approach.  “We expect more bank and financial institution partners to come on board for Lendr as we get ready to offer the service to consumers this year. Lendr is making consumer lending ‘always-on’ and ‘always-connected,” concluded Villanueva.