TransUnion is encouraging businesses to envisage an information-powered recovery as the Philippines targets growth in an economy emerging from the impact of COVID-19. The global information and insights company said that by ensuring that a consumer’s creditworthiness is accurately represented, financial institutions can expand their services to the unbanked and underserved.
“Prior to the pandemic, financial inclusion in the Philippines had been increasing at pace. A greater volume of institutions sharing financial information had enabled more consumers to access a greater range of financial services and products,” said TransUnion Philippines President and CEO Pia Arellano in a press statement.
Importance of information-powered recovery
“TransUnion’s priority when the pandemic hit was to ensure that services to our members and consumers remained business as usual even under lockdown, not only to honor our obligations but to really support them through the crisis. The whole situation was unprecedented, and it impacted our members and potential members differently. Now that the Philippines and the global economy is looking to the future, it’s important that everyone focuses on growth and joining together to help recovery efforts,” she said.
Before the pandemic, the percentage of the Filipino population that was credit visible was increasing with growing momentum, and although it has continued to increase during COVID-19, the rate has slowed significantly.
When COVID-19 hit, financial institutions shifted from a growth mindset characterized by increasing customer acquisition volumes, to a more cautious and reactive mode focused on managing their existing portfolios and ensuring that they didn’t become riskier as a result of the prevailing economic conditions and general uncertainty.
Unfortunately, developments on increasing the banked population and extending loans to entrepreneurs or consumers hoping to take the next steps in their lives (e.g., owning assets like property) were derailed or delayed by the pandemic. There are still tens of millions of Filipinos who aren’t credit visible and as such could have limited access to credit products and other services.
However, as the country moves to recuperate from the economic impact of COVID-19, TransUnion believes that the key to recovery lies in regaining the growth mindset, backed by the power of information.
Old problems, new solutions
Financial institutions have had to commence or accelerate their digital transformation efforts to keep up with both the sudden market demand and the competition from fintech and other new players, all while dealing with the rise in attempted fraud cases during the pandemic, especially during its early days.
TransUnion’s contribution has been the introduction of new core solutions which tackle old problems that came in new forms during the pandemic. For instance, it started harnessing the power of trended data and additional variables/attributes that expand understanding of consumer credit behavior.
These have enabled businesses to continue and even extend support to previously unbanked consumers. It also launched its seamless onboarding solution which provides financial institutions with transformative digital capabilities while helping mitigate fraud before it happens. Such support reaps benefits that extend even beyond the challenges of the pandemic.
“Our advocacy for re-establishing a growth mindset to aid economic recovery is underpinned by our promise that we can help create a reliable basis for mutual trust between lenders and consumers. At this point, our goal is to keep empowering financial institutions to solve old problems in new and better ways. This stems from the fact that TransUnion sees information not just for what it can do, but for what it can help people achieve. It’s how we plan to do our part in the bayanihan efforts to recover from this crisis as one nation,” Arellano said.
2020 forced shifts and developments in businesses, and 2021 is the time to focus on sustainable growth and greater stability. Implementing and streamlining strategies for the digital space remains a key focus and providing access to convenient digital experiences is now what consumers expect. While balancing risk is still necessary, a cautious return to rebuilding and lending to new customers is possible through informed decisions.