Helping Lenders Digitalise Loan Applications in a Market with Rapidly Growing Needs for Personal Loans

Helping lenders digitalise loan applications

Hong Kong has experienced five waves of COVID-19 since the start of the pandemic over two years ago. The virus has taken a heavy toll on the local economy, causing many people to lose their jobs or close their businesses. As a result, there’s been a rapid increase in demand for personal loans. At the same time, competition in the personal loans market is fierce; Hong Kong has over 2,000 financial institutions, according to the Companies Registry. Since the introduction of social distancing measures, many companies have started to acquire customers with online services and quick approval processes that allow cash transfer to applicants within a short time. With such strong demand and stiff competition, how can financial institutions set themselves apart from their competitors?

TransUnion is the first and one of the credit reference agencies in Hong Kong. With over 40 years of experience, a comprehensive database and extensive expertise, the company has been helping banks and financial institutions assess the credit records of borrowers. Even before the rise of digitalised finance, TransUnion has always been a long-trusted partner that helps banks and financial institutions make detailed assessments and verification of borrowers’ credit ratings. As digitalised financial services become the main channel for acquiring customers, financial institutions striving to meet potential customers’ needs are facing new challenges, such as fraud prevention, address proofing and providing instant loan approvals. To overcome these, TransUnion can play a significant role.

“Many consumers have experienced financial hardship during the pandemic. With social distancing measures, people have started to make more enquiries online. One of our key challenges is to let our potential customers know we’re a reliable financial institution”.

Paul Lui, Chief Operations Officer at UA Finance

Improving customer experience with digital-driven solutions

With TruValidateTM, the identity of the loan applicants can be verified online. Once they’ve filled in their personal details and uploaded their ID or address proof document using a mobile phone or tablet, the approval can be completed within several minutes and the amount will be released the same day. This process is supported by an extensive range of technology and data-driven solutions. Banks and financial institutions must be able to identify and authenticate the borrower’s mobile device and uploaded documents, and verify the applicant’s identity (through facial recognition), as well as their address, telephone number and credit records through our database. An integrated score can then be used to make a decision on the application, and determine the amount of the loan and interest rate.

“The TransUnion TruValidateTM suite was recognised by local regulatory body and became available in the market in 2019. In just a few years, our eKYC and digital onboarding solutions have been adopted by banks, financial institutions, digital wallets, virtual banks and MPF suppliers of all sizes. Since the launch of TruValidateTM, over 10 rounds of updates have been implemented to accommodate changing market needs and regulatory requirements. TruValidateTM eKYC solutions have been used over 2 million times, among which over 500,000 were recorded in the first quarter of 2022 (41% of the total number in 2021).”

Wingo Wong, Chief Business Officer at TransUnion Hong Kong

These figures evidence the increasing number of customers choosing to open accounts online, as well as the recognition TruValidateTM has received within the financial sector regarding its ability to offer an enhanced experience to our customers, helping them build trust with consumers with secure and efficient loan solutions.

TransUnion’s digital onboarding solution (Figure 1) provides support for all stages of the loan application process, from front-end settings and eKYC services to back-end ID verification, credit/risk assessments and loan approval, enabling lenders to comprehensively assess each applicant’s background and repayment ability and determine the most appropriate interest rates. In addition to facilitating access to credit for applicants, the solution also minimizes the risk of bad debt for lenders.

In a nutshell, TruValidateTM is a solution that helps financial institutions quickly review loan applications based on the applicant’s repayment ability. The solution is widely used by most TransUnion members.

“With TruValidateTM, we can manage the entire approval process including eKYC, facial recognition, and address and documents verification. In addition, TruValidateTM has improved the efficiency of loan approvals and shortened the time needed for cash transfer, boosting customer satisfaction and reducing operational expenses, as well as improving our capacity to handle customer queries.”

Alvin Wong, Chief Executive Officer at Rabbit Credit

Since the beginning of this year, TransUnion has received numerous requests for its digital onboarding solutions from financial institutions of various sizes — in hopes of benefitting from the improved customer experience TruValidateTM offers, enabling them to build better relationships with consumers under the new normal and accelerated digitalization. TransUnion aspires and strives to strengthen its digital solutions (and TruValidateTM) to support the continued growth of Hong Kong’s personal loan market.

For the original article published on Hong Kong Economic Times (available in Chinese), please click here.

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