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TransUnion helps banks say ‘yes’ to more borrowers

Information solutions provider TransUnion Philippines is in full support of extending more credit to more Filipinos, even as about 65 percent of the population is unbanked. TransUnion has already helped banks extend credit to at least 25,000 previously non-credited customers per month since 2012. 

TransUnion Philippines president and chief executive Pia Arellano (third from left) signs a partnership agreement with Gustav Eriksson (second from left), Collectius Group chief executive  to create practical payment arrangements that will help Filipinos eventually pay off their debts.  The partnership involves sharing data and using it to find solutions to credit-related situations.
As the country’s only private comprehensive credit bureau, TransUnion has a database of 18.5 million accounts used to create solutions that help banks and other financial institutions make smarter decisions and give them more confidence when extending credit.

Among TransUnion’s products is the New-to-Credit score that allows banks to assess a non-credited individual’s risk potential. It uses a look-alike model generated using sophisticated algorithms based on data the bureau currently has. It simulates behavior based on the person’s demographics. This practice allows financial institutions to consider granting loans even to those who have no previous credit card or loan records. 

“The economy has been very bullish. So many new financial players are entering the market, many of whom are FinTechs. With more lenders in the marketplace, consumers may have more opportunities to access credit. TransUnion not only allows lenders to extend more credit but empowers them to make accurate decisions given that we have data on historical behavior,” said Pia Arellano, president and chief executive of TransUnion Philippines. 

TransUnion works on a data sharing model, where members have to contribute data before they can access that of all the other members, albeit in a masked form in compliance to data privacy laws. The database is refreshed monthly to keep records up-to-date, taking into account both positive and negative aspects. 

The bureau currently has 44 members on board, cutting across commercial banks, credit card issuers, financing companies, and cooperatives, among others, thereby giving members a line of sight on the entire market, not limited to their own portfolio or even respective industries. 

In line with its goal of serving as a catalyst that fuels the economy, TransUnion is developing a bureau score for small and medium enterprises to boost entrepreneurship in the country.

“We’re planning to launch a special SME-specific score sometime next year. We’re hoping to collaborate with banks that cater to them and the prospects look really very promising,” Arellano said.

TransUnion Philippines was incorporated in 2011 by the country’s five biggest credit card issuers, BDO, BPI, Metrobank, Citibank, and HSBC. TransUnion has two offices in the Asia Pacific―the Philippines and Hong Kong.

It works closely with government bureaus in other Asian countries like Thailand, Singapore, Malaysia, China, Vietnam, Indonesia, and India. Its strategic position as an emerging market makes the Philippines a good starting point for TransUnion’s portfolio of services. 

Topics: TransUnion Philippines , information solutions , Pia Arellano
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