Press Release
HSBC-Backed Bizbaz Announces Strategic Partnership with RCBC Bank to Integrate AI-Driven Credit Scoring to Expand Lending & Increase Financial Inclusion
The new partnership facilitates credit access for MSMEs and the massive underbanked and unbanked population in the Philippines. By leveraging Bizbaz’s AI-enabled comprehensive credit assessment and scoring tool, which includes voice-only risk and behavioral assessment technology, the Bank improves predictability and reduces default risks.
Singapore, Thurs, Nov. 16, 2023 – Bizbaz, an institutional-grade AI-driven credit scoring and risk models assessment solution for the unbanked and underbanked in Asia based in Singapore, today announced its partnership with RCBC, a leading national retail bank in the Philippines.
As part of the partnership, RCBC will pilot Bizbaz’s AI-driven credit assessment and scoring tool which aims to broaden access to loans, especially within the MSMEs, unbanked, and underbanked communities. The initiative will also support the reduction of non-performing loan (NPL) risks, offering improved predictability assessments.
“The current credit system is broken, with most banks in Asia relying on financial history-based credit risk systems. With most of the Asian population not even having a credit score, the current system is obsolete. There needs to be an alternative that can harness the latest AI technology and behavioral science data available.
For MSMEs, this translates to access to a credit lifeline that would otherwise be unattainable. For banks like RCBC, this aligns with their commitment to financial inclusion and innovation, increasing predictability, reducing NPL risks, and leading to long-term cost savings,” said Hayk Hakobyan, CEO and co-founder of Bizbaz.
Notably, in the Philippines, 78% of the bankable population falls either unbanked or underbanked, positioning the country among the top 10 nations with a significant unbanked population. Additionally, Southeast Asia has witnessed a steady rise in NPLs in recent years, with the World Bank projecting an increase in the NPL ratio to 5.9% in 2023 from 5.7% in 2022, surpassing the global average of 4.2%. In the Philippines alone, the NPL ratio stands at 4.2%. The World Bank estimates that Southeast Asia incurs an annual loss of approximately 50 billion USD due to non-performing loans (NPLs).
“RCBC strives to be at the forefront of emerging technologies and data-driven innovations. With this partnership with BizBaz, we can maximize AI’s massive potential and unlock more opportunities for our countrymen, especially the MSMEs,” said Eugene S. Acevedo, RCBC President and CEO.
Bizbaz creates a customer or business risk profile by analysing financials, health, lifestyle, and social footprints. Leveraging personality-based and voice-based risk assessments, Bizbaz determines suitability for loans. This approach results in a more accurate and comprehensive credit scoring system that considers a broader array of data, including alternative sources. The streamlined process facilitates faster and more efficient credit scoring, reducing the time borrowers wait for loan approval and mitigating bank default risks.
Current clients, including a national Indonesia-based bank, have seen increased revenue between 2-3x, reduced customer acquisition costs by up to 40%, and reduced bad debt default by up to 50%.
We are thrilled to announce our strategic partnership with Bizbaz, making a significant leap forward in our commitment to financial inclusion in the Philippines. We believe that by integrating AI into our credit score assessment process, we are not just innovating; we are pioneering a path towards greater access and opportunity for MSMEs,” said Lito Villanueva, Executive Vice President and Chief Innovation and Inclusion Officer of RCBC.
Bizbaz previously closed its $4M seed funding in October 2022, led by HSBC Asset Management in addition to investments from Vynn Capital and SOSV.
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Note to editor:
Additional quotes from RCBC:
“We are looking forward to test and learn using alternative and radical data points for predictive AI scoring. This will allow the bank to know our MSMEs deeply and be able to aid them with their capitalization needs; whilst balancing the risks,” said Ma. Pamela Katrina Cabudoy, RCBC Group Head – Data Science & Analytics.
“RCBC has been exploring the use of AI-based scoring for MSMEs. A challenging market due to lack of traditional data, the use of AI would allow us to access thousands of non-traditional data that would give insights on potential MSMEs propensity and ability to pay,” said Bennett Clarence Santiago, RCBC Chief Credit Officer.
Media Kit
Here is the media kit for the announcement.
Media Contact
Peggy Wu, Managing Director of Milkfish
peggy@themilkfish.com
About Bizbaz
Bizbaz is an institutional-grade AI-driven credit scoring and risk models assessment solution for the unbanked and underbanked in Southeast Asia. Bizbaz offers two solutions for assessing individuals and businesses. The institutional risk assessment provides customer profiling and scoring powered by AI. This empowers financial institutions firms in Asia to gain insights into their customers’ current and future behaviors. The business risk assessment evaluates Asian MSMEs based on various factors, including owner risk, industry, and financial profile. For more information, please visit www.bizbaz.tech.
About RCBC
RCBC has emerged as the fastest-growing bank in the country, leapfrogging from eighth position in 2018 to fifth in 2022 among the Philippines’ largest privately owned banks in terms of assets. For over 60 years, RCBC has been building a reputation for providing the best customer experience, award-winning digital banking services, and pioneering innovations. It provides consumer, commercial, and corporate lending products, deposits and cash management solutions, treasury products, remittance services, and mobile banking services.
In 2021, Sumitomo Mitsui Banking Corp. (SMBC), one of the largest megabanks in Japan, invested Php 4.48 billion in RCBC in exchange for a 4.99% stake. In November 2022, RCBC’s Board of Directors approved the increase in SMBC’s shareholding to 20.00%, bringing in Php 27.13 billion (approximately USD487.14 million) of new Core Equity Tier 1 (CET1) capital to the Bank. RCBC has received various local and global recognitions, including a four-peat award as the Philippines’ Best Bank for Digital by Asiamoney, the Eye on Innovation Award by Gartner, and Rank 1 in the Philippine Best Customer Service 2023 survey by the Philippine Daily Inquirer and global research firm Statista.