United Overseas Bank (UOB) and Pintec Technology recently announced the launch of their joint venture, Avatec. Avatec aims to help banks and finance companies to be more efficient and more accurate when assessing credit quality of potential customers, including those who are new to credit. The digital solution can also be extended to companies in sectors such as e-commerce, retail and travel that offer financial products such as point-of-sale financing.
According to KPMG, only 27 per cent of Southeast Asia’s 600 million people hold a bank account1. Within this segment, many people are still underserved when it comes to being able to access credit. These include young professionals at the beginning of their careers and small businesses.
Avatec provides companies offering financial products with an innovative next-generation credit assessment solution that analyses a broader set of digitised data beyond that which is traditionally used in evaluating personal or business credit applications. Avatec’s credit assessment tool harnesses the power of artificial intelligence, machine learning and anti-fraud algorithms to determine an applicant’s credit quality within seconds.
Mr Dennis Tan, Chief Executive Officer Designate, Avatec, said that the new company brings together the insights gleaned from UOB’s more than 80 years of serving consumers and businesses in Southeast Asia and PINTEC’s financial technology (FinTech) capabilities to help companies tap growth opportunities within the region.
“Avatec’s end-to-end intelligent digital credit assessment solution is not only useful to financial institutions, it will also enable companies in sectors such as e-commerce, telecommunications, retail and travel to offer financial products such as point-of-sale financing, and personal and business loans quickly and efficiently. By making financial products more inclusive, these companies will be able to connect with a larger base of customers in the region,” Mr Tan said.
Avatec is incorporated as a subsidiary company of UOB, with UOB owning the majority stake (60 per cent) and PINTEC the minority stake (40 per cent). The Bank will invest up to S$12 million in Avatec over the next two years.
Dr Dennis Khoo, Head of Regional Digital Bank and Strategic Initiatives, UOB, said the Bank’s strategic investment in Avatec is the first in a series of groundbreaking digital initiatives that will be launched in 2018.
“Robust credit risk management is fundamental to the strength of the financial system. Avatec’s next-generation digital solution will enhance the performance of our business through the underwriting of better quality loans to more customers who previously would not have had access to credit. The customer experience will also be simpler and faster as customers will know almost instantly if their online application for a loan with UOB is approved. While UOB will benefit from Avatec’s unique credit assessment capability and advanced analytics, we expect other companies too will use the solution to seize new business opportunities and to spur more financial inclusion across the region,” Dr Khoo said.
Mr William Wei, founder and CEO of PINTEC said that the partnership with UOB will help the financial technology firm to expand further into Southeast Asia.
“There is a growing demand for financial technology (FinTech) solutions in Southeast Asia as companies explore using technology to capture growth opportunities in the digital economy. As a leading independent technology platform enabling financial services in China, we are well-positioned to meet the needs of companies who want to use technology to serve more customers and to serve them better. Our collaboration with UOB, a leading bank in the region, will assist us with the expansion of our FinTech solutions into Southeast Asia. This is the next phase of our strategy in the region, which is also in line with China’s Belt and Road Initiative,” Mr Wei said.
Avatec will launch its next-generation digital credit assessment solution in Indonesia, followed by other Southeast Asian markets within the next two years.