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Technology ushers in more online borrowers

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Targeting middle-income customers who prefer convenience and have high demand for consumer loans, fintech firms have been improving their strength and solidifying their positions through the technology content applied on products.

Fintech borrowing on the rise

Statistics indicated that the number of consumer loans at commercial banks, financial firms and fintech companies still increased steadfastly during the Covid-19 pandemic.

Middle-income customers’ demand for consumer loans has increased stably. A representative of ATM Online, a fintech company active in online lending, said that the firm received an average of 4,000 requests for borrowing each day.

Data from the fintech company showed that as of end-March, among 400,000 customers using financial services at ATM Online, over 50% of them had got two loans or more. The data also indicated that 30% and 10% of the total had got three and five loans or more, respectively.

“The number of return customers is high, proving that customers knew how to take advantages of convenient services provided by fintech firms,” said Do Minh Hai, director of ATM Online.

However, to help customers manage their money, fintech firms and their partners only offer one loan at a time. Customers only get another when their existing loans have been settled, according to the leader of ATM Online.
One main reason behind the increasing number of consumption loans is loan disbursement technology. On ATM Online’s platform, return customers’ requests for loans are handled within two minutes each, while a request from new customer is handled within 7-15 minutes.

These loans will be disbursed automatically and quickly if customers provide correct information and cooperate with the platform during the appraisal process, said the ATM Online representative.

Apart from automatic disbursement, customers can repay loans easily. ATM Online has also cooperated with some partners that offer e-payment gateways to make it easier for customers to make payments. Accordingly, ATM Online deploys a payment method based on personal accounts, so each customer will be provided with one bank account by its partner bank. With these accounts, customers can make monthly payments via their smartphones or laptops/computers. Transactions will be conducted immediately on the system.

Technology “filter” makes loans more “responsible”

Last year, management agencies repeatedly warned residents of scams through financial products. Besides, hackers also targeted online loans. Many scammers used fake identification cards to get loans.

To prevent frauds and scams, ATM Online and its partners have invested in electronic identity verification, face recognition, optical character recognition and voice recognition solutions.

With data from browser queries, ATM Online records customers’ interactions when using computers or smartphones to send a request for loans. These data, which are encrypted and analyzed, coupled with personal information, help determine whether customers are the authentic subjects or not.

“ATM Online’s scoring system, with 15 variables from the beginning, has seen credit score synthesized from over 300 variables with high accuracy after three years of operation, driven by thick customer data,” Hai said.

Aside from convenience and “anti-risk hedge” made possible by technology, improving service quality and helping customers know online lending products contribute to retaining customers. In 2020, ATM Online focused on upgrading experience and updating knowledge for customers on its services via the 14-day cooling-off period program applied to new customers.

Specifically, borrowers had 14 days to consider the loan that they registered and applied for. They could return the sum of money that was disbursed if they did not want to borrow any more. They would be exempt from interest rate, consulting and service fees during the 14-day period.

Last year, in addition to offering loans valued at VND3-12 million, ATM Online provided customers with a super-small loan worth as low as VND900,000. “The fintech lending firm expected the specially-designed loans to help customers get to know online lending products and experience services at ATM Online more proactively,” Hai said.

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