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UBX beefs up lending platform SeekCap with AI technology

UBX, the leading open finance platform in the Philippines, has forged a strategic partnership with Aboitiz Data Innovation (ADI) to integrate artificial intelligence (AI) solutions in its lending platform SeekCap.

During the inaugural AI Summit PH 2023, UBX and ADI signed a partnership agreement to champion financial inclusion and sustainability through innovation and technology.

The partnership is a testament to how UBX and ADI embrace innovation and technology by unlocking cross-ecosystem opportunities, while ensuring compliance with data privacy and security policies.

Currently, UBX and Union Bank of the Philippines leverage an AI-powered alternative credit scoring solution, making it possible for them to offer loans to a broader range of individuals and small businesses who may not have qualified under traditional scoring methods.

“We identified a few years ago that the MSME segment is a big opening, since many of them are very underserved. A lot of these businesses don’t even have bank accounts, hence scoring them would be a challenge. By using alternative data, we are able to appropriately determine the credit score of MSMEs, allowing us to extend credit to those who couldn’t get it and give it to them at better rates,” UBX President John Januszczak said.

According to the Department of Trade and Industry (DTI), MSMEs accounted for 99.51 percent of businesses in the country in 2020. However, the latest data from the Bangko Sentral ng Pilipinas (BSP) showed that loans disbursed to MSMEs only reached P454.31 billion from January to September 2022, representing only 4.91 percent in compliance ratio, which is still below the 10-percent threshold under the Republic Act No. 6977 or the Magna Carta for MSMEs.

“Through our partnership with ADI – an APAC leader in data science and AI innovation – we are able to improve SeekCap’s services and provide democratized access to business financing to smaller businesses,” Januszczak said.

Aside from the alternative credit scoring capability, the partnership also paved the way for the introduction of SeekCap PortfolioPro, a new AI-powered service that streamlines the process of building a borrower portfolio.

PortfolioPro enables partner lenders to grow their borrower portfolio at scale with scored and qualified leads that meet their preferences. This will enable the platform’s lenders to grant loans with greater confidence and finetune their risk appetite. More importantly, it will benefit a broader range of individuals and small businesses to qualify for a loan from an expanded pool of the lending community, all while improving customer experience by reducing friction. The new AI-powered credit scoring solution also filters fraud, confirming identities at a 99.99-percent confidence rate.

“This is an exciting partnership for ADI and UBX as we drive more informed lending practices at scale through the SeekCap platform by empowering lenders to better understand the credit potential of applicants as well as enabling by extension more freedom of choice and inclusion for borrowers from all backgrounds. AI can supplement existing lending practices and offer a different lens to drive data-driven decision-making,” said Guy Sheppard, Aboitiz Data Innovation Chief Operating Officer for Financial Services.

PortfolioPro follows a six-step filtration process that is highly effective in determining the best qualified businesses for each portfolio, ensuring added security when lending out to potential borrowers. At the onset, the borrower is validated through SeekCap Credit Risk Filters, enabling the lender to look into each potential debtor’s credit history with Philippine banking and microlending data.

Ultimately, after being presented with a comprehensive report on the borrower’s background, AI is then utilized to analyze and assess the borrower’s creditworthiness.

Aside from quickly matching borrowers and lenders, SeekCap lenders may also streamline their loan collections via UBX’s payment platform, BUx.

“The main thrust of SeekCap has always been to build a bridge between borrowers and lenders. With open finance, the accessibility of data is geared towards the benefit of the consumer, not just the institution which collects it. Consent is at the heart of our operations,” Januszczak said.

Since May 2023, SeekCap has processed more than P26 billion in loans from over 65,000 MSMEs. With the partnership with ADI, UBX expects this to tread on a growth path, reaching more entrepreneurs and growing businesses in the Philippines.

“Every milestone we achieve in SeekCap is a step closer towards financial inclusion, particularly for MSMEs who are the main stakeholders in loan accessibility in the Philippines. We hope to bring in more partners in the future and activate more channels to continue bringing in the best services to more borrowers across the archipelago,” Januszczak said.

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