Tran­sUnion sees up­surge in new credit spend­ing from mil­len­ni­als

Manila Bulletin - - Business News - By BERNIE CAHILES-MAGKILAT

ran­sUnion Philip­pines re­veals that nearly 60 per­cent of newto-credit ac­counts opened in 2017 are by mil­len­ni­als. This is a trend that has in­creased over the last four years and has con­tin­ued to grow in promi­nence na­tion­wide, from 40 per­cent in Oc­to­ber 2013 to 57 per­cent in the same month in 2017.

New-To-Credit or NTC ac­counts are con­sumers who have no bor­row­ing or pay­ment his­tory from loan fa­cil­i­ties such as credit card ac­counts or per­sonal, auto, or mort­gage loans. Banked in­di­vid­u­als with check­ing or sav­ing ac­counts but with­out loans or a credit his­tory in Tran­sUnion’s data­base are also con­sid­ered NTC.

This in­crease in de­mand for fi­nan­cial ser­vices amongst mil­len­ni­als is a re­sult of a num­ber of con­verg­ing fac­tors. Tech­nol­ogy is a ma­jor driv­ing force in the aware­ness and use of fi­nan­cial ser­vices to­day, with young pro­fes­sion­als look­ing to ben­e­fit from their im­prov­ing fi­nances and the ac­cess to ad­di­tional ser­vices and prod­ucts it brings. Lenders are also be­com­ing more ad­vanced in the way they view those who are NTC, uti­liz­ing scores and ser­vices pro­vided by com­pa­nies like Tran­sUnion to as­sess their credit wor­thi­ness and abil­ity to re­pay.

“Mil­len­ni­als are now at a stage in their pro­fes­sional ca­reers where they have the abil­ity to ac­cess ser­vices that can help them with their fi­nances. The ex­is­tence of tech­nol­ogy that en­ables them to be aware of such ser­vices, cou­pled with the ease by which they can ap­ply, re­sults in them hav­ing more drive in gain­ing credit and the many ben­e­fits it can bring to their eco­nomic lives,” said Tran­sUnion Philip­pines Pres­i­dent and CEO Pia Arel­lano.

Tran­sUnion be­lieves that mil­len­ni­als, and their in­creased aware­ness of their fi­nances, is paving the way for greater fi­nan­cial in­clu­sion for gen­er­a­tions to come. Mil­len­ni­als are be­com­ing more open at an ear­lier stage in their lives re­gard­ing their abil­ity to ac­cess fi­nan­cial ser­vices. As each gen­er­a­tion gets more com­fort­able with the use of tech­nol­ogy and ob­tain­ing credit, this prac­tice be­comes more com­mon, bet­ter un­der­stood and bet­ter serviced by an in­creas­ingly so­phis­ti­cated and tai­lored lend­ing mar­ket.

Hav­ing had no pre­vi­ous record of cred­it­wor­thi­ness, NTC con­sumers have his­tor­i­cally been ig­nored or dif­fi­cult to un­der­write for prospec­tive lenders. In­creas­ingly, lenders are seek­ing new so­lu­tions and as in the case of mil­len­ni­als, have started us­ing Tran­sUnion’s spe­cially de­signed score de­vel­oped us­ing com­pre­hen­sive bu­reau data from dif­fer­ent fi­nan­cial in­sti­tu­tions. This NTC score al­lows Tran­sUnion’s mem­bers to ef­fi­ciently as­sess risk and bet­ter un­der­stand its cus­tomer’s fi­nan­cial po­si­tion when ex­tend­ing credit. It em­pow­ers them to be more con­fi­dent in mak­ing in­formed de­ci­sions that will cre­ate op­por­tu­ni­ties, both for their busi­ness and the con­sumers they lend to.

“These ad­vance­ments are good news be­cause they fur­ther drive fi­nan­cial in­clu­sion across the Philip­pines and is in­dica­tive of a grow­ing gen­er­a­tion of con­sumers that has the need for such prod­ucts and ser­vices. This puts our econ­omy in a good po­si­tion as it in­creases the ex­change of goods and ser­vices that will set eco­nomic ac­tiv­ity on an up­ward path,” Arel­lano said.

Tran­sUnion be­lieves this mo­men­tum for credit is be­ing driven by an in­creased aware­ness of the ben­e­fits that it can bring to the lives of the ev­ery­day Filipino. By ad­vo­cat­ing fi­nan­cial lit­er­acy among more Filipinos, it hopes to cor­rect neg­a­tive im­pres­sions on how re­spon­si­ble lend­ing works and dis­pel fears that it will only re­sult in fur­ther debt that will dis­ad­van­tage peo­ple fi­nan­cially.

“With the most com­pre­hen­sive data­base of con­sumer credit in­for­ma­tion avail­able in the Philip­pines, the grow­ing ap­petite for con­sumer credit is some­thing Tran­sunion has been able to ob­serve over a num­ber of years. We be­lieve the rise in bor­row­ing needs to be sup­ple­mented with fur­ther ed­u­ca­tion fo­cused on fi­nan­cial aware­ness and re­spon­si­bil­ity in order to sus­tain the po­ten­tial gains for the econ­omy.

“By ed­u­cat­ing bor­row­ers, we em­power them to make in­formed fi­nan­cial de­ci­sions. It is no one’s in­ter­est – lenders or bor­row­ers – to ad­vance loans con­sumers can­not af­ford to re­pay. In­creas­ingly so­phis­ti­cated un­der­writ­ing de­ci­sions, pow­ered by en­hanced data, to con­sumers that un­der­stand and are bet­ter able to man­age their fi­nances is in the in­ter­ests of all in­volved.” Arel­lano con­cluded.

With fi­nan­cial in­clu­sion at the core of its be­ing, Tran­sUnion is com­mit­ted to uti­liz­ing the wealth of in­for­ma­tion avail­able at its dis­posal for good. Each step of the way, it is ful­fill­ing its ul­ti­mate goal of sup­port­ing both the im­prove­ment of Filipinos’ lives and the growth of busi­nesses.

Tran­sUnion is the coun­try’s only pri­vate com­pre­hen­sive credit bu­reau and in­for­ma­tion so­lu­tions provider. It prides it­self on the qual­ity of its data and value-added ser­vices, help­ing clients with ac­qui­si­tion, port­fo­lio man­age­ment, and col­lec­tions, among oth­ers. Clients sub­scribed to the Tran­sUnion data­base can search any con­sumer and ob­tain a credit re­port, with an NTC score au­to­mat­i­cally gen­er­ated, if nec­es­sary

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