Targeting the Unbanked and Alternative Credit Scoring

How to reach the previously unbanked

Many companies such as Paypal and Safaricom, two vastly different companies, one in payment switching and the other in telecoms, understand the value of targeting the unbanked.  In April, Paypal began their expansion into the traditional banking arena by working with other banking partners, each offering an aspect of a full banking product.  This is an exciting development for consumers that do not have bank accounts or credit records.  It allows them access to services and credit they previously would not be able to get.

This kind of venture has been made possible with technological advancements in Fintech.  Unbanked clients are no longer a deep dark pit no can see in to.  This is particularly relevant for emerging markets such as the greater African continent.

Whilst Bitcoin may be the way forward for some, mobile payments will be the best way to appeal to the tech wary easing previously unbanked consumers into using traditional bank services.  In fact, Safaricom, one of Kenya’s biggest telecommunication companies collaborated with Paypalto enable Kenyans to move money between their M-PESA and PayPal accounts.  This means that Kenyan users will be able to make online purchases which opens up a new market for businesses hoping to target the unbanked segment.  E-commerce companies specifically will benefit from the unbanked moving online.

For consumers wanting to take advantage of mobile payments there are three top types of channels.

  • mPOS. Merchants accept credit card payments via a card reader that attaches to a mobile device
  • Mobile wallet. Consumers can store their credit card details in their electronic wallets, this is already a popular form of payment globally.
  • Mobile money. Consumers can load mobile money accounts with cash without having a credit card or bank account

Some companies may not necessarily be satisfied with providing a method of payment and receiving their income from interest or fees.  Those companies who want to push past that level of interaction will be looking to sell credit to un-marketed, unsaturated, unbanked non-traditional customers.

Businesses intending to do so have had to change the way they define and perform risk scoring, because obviously, unbanked clients do not have a credit record. Imagine being able to service an enormous completely untapped market?  The wealth of products you could introduce are not limited to asset finance!

It is quite apparent that your run of the mill credit scoring is just not adequate. It is imperative for businesses to explore alternative methods of risk scoring. One company that is offering an alternative to traditional credit scoring is Vizibiliti Insight.

Vizibiliti Insight is a South African based tech business that uses machine learning, predictive analytics and first and third-party data to deliver a score that is based on an individual’s propensity to honour their debt.  Additionally, they able to take the data they receive and translate it to a customer profile which offers insight into their buying preferences.  This means that by focusing on alternative risk scoring you can also uncover leads and increase your sales conversion rate.  They are providing a level of detail which is invaluable to any company looking for a scientific way to sell to their prospective and current customer base.

If you want to find out more about how Vizibiliti Insight is able to achieve this with tech and data then please follow our social media handles to follow our pitch presentation to Verizon, the world’s second largest telecommunications provider, at Viva Technology Paris later this week.

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