How Fintech is helping Southeast Asia’s unbanked

Move beyond your point of sale

Southeast Asia has shown itself to be one of the most rapidly advancing regions in the world. With a booming population of over 644 million (and rising), half of whom are internet and social media users, you would expect that most people around the region would have access to most of the basic necessities required for modern life. You may find it surprising, then, that some estimates point out that a quarter of the region’s population is unbanked (don’t have a formal bank account).

For a region that has such a high internet penetration rate, it’s hard to fathom that something many of us consider basic, like access to a bank and credit, is unavailable to so much of the Southeast Asian population.

Empowering the masses

The traditional banking model will always make it difficult for those who aspire to enter the middle to secure credit. The need for paperwork will always be there, even though there are alternative ways to prove that one would be a safe credit risk.

Fortunately, a few fintech companies are thinking out of the box to bring about a positive change for those who need it most.

Alternative credit scoring

One of these is Juvo, a company that operates out of San Francisco, and has offices in the Americas, Europe and Asia. They have created an app that analyses user mobile behaviour and qualifies their relationship for financial institutions. The Juvo team, call this “identity scoring”, users can then use these scores to borrow voice, data and balance.

The potential for Juvo and their proprietary product is huge. They present a chance for the 2 billion unbanked consumers to secure loans through alternative credit scoring, which will then allow them to improve their quality of life. It is an interesting model for those who would be otherwise be ignored by virtue of being unbanked because they don’t have the paper trail available as proof for moneylenders.

High rates of unbanked are prevalent in remote areas, where it does not make sense for a bank to set up a branch – and people suffer because they may need to make an extremely long trip just to access basic financial services. The upside can’t be ignored, as widening the availability of financial services opens up a hefty new market that would otherwise have remained underserved. There are many other companies that offer comparable services as well, such as Lenddo and TrustingSocial.

The resources are there for financial inclusion

Data, as we have mentioned in our previous blog posts, serve as a great guide to enhance customer experiences. Using the previous Juvo example, it serves as a strong reminder that there are vast amounts of underutilised data to be harnessed for financial inclusion. 

A combination of advances in connectivity, mobile saturation, and eagerness of the snake person demographic in emerging markets, has meant that financial inclusion is closer than ever and services like Youtap and Juvo are bringing this vision to reality.

Youtap provides a wide array of merchant customer identity authentication capability through our platform.

We are experts in emerging markets and providing financial services to these markets. Let’s connect and see if we can bring financial inclusion to all.

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