AI and fintech to increase financial inclusion in Thailand
One of the biggest problems in the world is financial inclusion for the underbanked and unbanked society. While fintech is helping to solve this quickly, there are still around 1.7 billion unbanked people globally.
In Southeast Asia, about 70% of the population contributes to these numbers, with Vietnam, Indonesia and the Philippines making up a large part of it. Interestingly in Thailand, up to 63% of the Thai adult population is either unbanked or underbanked as well. These include low-income consumers or micro or small and medium-sized enterprises operating outside the banking system.
The Thai government is now working to ensure access to the banking system and financial services for 30+ million Thai people through the implementation of modern digital technologies. And fintech is becoming the best method to reach these people and ensure they have the best financial access.
A company that champions this is MONIX Co. The fintech design of SCB X Group and China’s fintech unicorn Abakus Group. .
According to Arche Zhou, Product Director of MONIX, while Thailand has a large proportion of people who do not have a bank account, the same people are actually also digitally savvy and offer a lot of potential for the use of our innovative financial products. Therefore, MONIX decided to do the right thing by making lending easier and more accessible to them with the user-friendly FINNIX app.
The FINNIX mobile app, which is regulated by the Bank of Thailand, offers 24/7 microfinance loans through a 100% digital process from loan application to approval and disbursement. Considered the top digital lending app on the Google Play Store and Apple App Store in Thailand, Thai consumers who previously did not have a bank account can easily apply for credit in less than five minutes with just their smartphone and an Internet connection. The FINNIX app has since paid out over 10 billion Thai baht.
However, simplifying loan processing and payment is only part of the solution. Many users still needed to be educated about financial inclusion, especially how to use the app, especially when it came to keeping their money and information secure.
To improve this, MONIX partnered with Singapore-based AI firm ADVANCE.AI to power their electronic KYC (Know Your Customer) user journey. The steps included a quick selfie with the smartphone’s camera along with a scan of the Thai national ID card to authenticate the user’s identity. The entire process can be completed in less than 60 seconds.
“Trust is very important in the fintech industry. For us, as a business, it’s important to know who we’re handing out money to and how we’re going to get it back,” said Chalinee Boonsongsup (Poppy), product owner of MONIX, who added that the app’s NPL (non-performing loan ratio is in single digits.
“In this way, authentication is important, so we need to make sure we have the right tools to really know our customers. On the other hand, we need our customers to trust us with the information they shared with us,” added Poppy.
“We want our customers to know that they are in safe hands, especially since many of them have been excluded from the financial system. It is important that they trust the product and our company. ADVANCE.AI’s eKYC solution leveraging cutting-edge artificial intelligence (AI) technology not only helps us comply with regulatory biometric requirements – it works for the underbanked, added Arche.
Mohammed Fouladi, Regional Head of Customer Value Proposition, at ADVANCE.AI commented, with advances in artificial intelligence, the traditional customer onboarding, compliance and credit decision process can be completely re-designed in a way that is simple and convenient, but safe for both the end consumer and the financial institution. Fouladi also highlighted that the pressing challenge for financial institutions (FIs) is to think and decide how AI can shape and modernize the customer’s post-pandemic banking experience.
