Digital shift can boost financial inclusion

DIGITAL transformation can enable more banks to enroll more Filipinos to the formal financial system and create a more seamless and personal consumer journey, a TransUnion global research into consumer attitudes toward credit said.

Pia Arellano, president and chief executive officer of TransUnion Philippines, said banks can transform their offerings to consumers by adopting an integrated approach to digital transformation using technology to introduce new ways of doing business by harnessing data, streamlining processes and enhancing customer experience, all of which lead to better conversion rates, too.

However, meaningful and effective digital transformation must be rolled out strategically via an integrated methodology, as it fundamentally changes how financial institutions operate and deliver value to their customers, Arellano said.

“A top-down approach to the process of offering online and digital services is needed, one that integrates digital systems, applications, customer experience platforms and infrastructure,” she added.

The Tran sUnion study found that 51 percent of credit unserved consumers and 52 percent of underserved consumers in the Philippines expected their credit needs to increase within the next three to five years.

Credit unserved consumers are people who never had traditional credit products like credit cards or auto loans, while underserved consumers have minimal credit participation usually limited to a single type of product. Among these consumer groups, a lengthy approval process was cited as a factor for rejecting credit offers (17 percent of unserved and 8 percent of underserved consumers).

In a traditional consumer pipeline, Arellano cited that customers often go through several departments before receiving a product or service. “A carefully designed application and approval process that integrates everything into a single online platform could move prospective customers from marketing to sales, to onboarding, all the way to being active and utilizing customer support, much more quickly and efficiently, with fewer leads falling away,” she pointed out.

“Achieving this entails investing time and resources to gain a keen understanding of consumers’ wants and needs. By doing so, operational processes become more streamlined with automation, freeing up staff to concentrate on other value-added services and support — helping build customer loyalty and satisfaction,” Arellano added.