Since the start of the COVID-19 pandemic, consumer demand for digital banking has never been greater in the Philippines.
For instance, one of the top commercial banks in the Philippines logged a staggering 259% increase on new sign-ups via its online banking service in the first three days following the government’s implementation of the Enhanced Community Quarantine (ECQ). From a daily average of 431 sign-ups pre-COVID, bank data recorded an average of 1,166 new enrollments per day after the enforcement of the ECQ.
More Filipinos Turn to Digital Banking During The Quarantine
The numbers aren’t at all surprising, and many of the country’s leading banks are experiencing similar upward trends. One of the largest universal banks in the Philippines also opened 7,000 new digital accounts in March, with over 20,000 customers downloading the bank’s mobile app in the same month. There were also 1.1 people who logged on to the bank’s website last March, which was double the average amount pre-COVID.
As social distancing will inevitably become the “new normal,” COVID-19 has become a digital banking reality check for both consumers and financial institutions. From opening new accounts to applying for loans, banks and financial institutions need to step up their game to support banking operations without the absolute need for consumers to head to physical branches.
Mobile Data Usage Increase During Quarantine
In line with Filipino consumers switching to online banking, mobile data usage has also surged in the country during the ECQ. According to a report from Rappler, there was a 13.4% jump in mobile WiFi use in the Philippines in the first week of the ECQ. Due to social distancing and mobility restrictions, more and more people are spending time connected to WiFi on their smartphones.
This has also led to telco subscribers maximizing plans and bundles that provide them with the highest amount of megabytes available without having to shell out more cash on load top-ups. You can read our article on the impact of COVID-19 on consumers to learn more about this trend.
Aside from isolated individuals using video services like Skype and Messenger to stay in touch, many business meetings have also moved to Zoom and schools to Google Classroom. Additionally, consumers have been using their online bank accounts and other digital apps to replace physical transactions. They have also started doing monthly payments using various applications on their smartphones.
Leverage Alternative Data to Your Advantage
If there’s anything the pandemic has amplified for the financial sector, it’s the need for all banks to go digital. As everyone has been forced to limit physical contact and data consumption has risen extraordinarily, banks can leverage the rise in mobile data usage to their advantage.
How exactly? Four words: Telco data credit scoring.
Telecommunication providers capture various data points on mobile phone usage such as call duration, prepaid reload amount, SIM age, handsets used, and many others. To know more about what insight it can tell, we have just posted something on LinkedIn about it. You may click here. When all these factors are analyzed, they form a single category called telco data.
While telco data credit scoring is originally intended to create new avenues of credit for unbanked individuals, this new form of predictive credit scoring can be the game-changer for the financial sector in the time of COVID-19. As more and more people use digital payment channels to pay for bills and transactions, banks can now easily evaluate an individual’s creditworthiness based on transactions made online and their mobile data activity. This makes it easier for banks and other financial institutions to target customers who have the ability to pay back loans, even amidst the ongoing pandemic.
Telco Data Scoring in The Philippines
Telco data credit scoring is relatively new, but as the only fintech company in the Philippines, we at FinScore have been empowering banks, credit bureaus, and financial institutions for years with flexible platforms that help them make valuable credit decisions.
As COVID-19 continues to impact the economy, it will be crucial for banks to ensure continuity of operations. This means quickly adapting to the situation with innovative solutions. Leveraging insights provided by mobile device usage and telco data is one of the innovative ways banks can rise above today’s challenges.
Neobanks are taking the lead
In the first quarter of 2021, the Bangko Sentral ng Pilipinas (BSP) or the Philippine Central Bank has successfully granted one of our clients, Tonik, a digital banking license in the Philippines. As a digital-only bank, they are offering a faster and the most convenient way to save money and make payments. Their lending service, which is coming soon, will be using our Telco Credit Scoring service so that Tonik users can have the same, seamless experience in digital banking. See the full details of the partnership here.
For more information on telco data credit scoring, contact FinScore today. Simply answer the form below. Our team will respond to you the soonest.
