Credibility: A key criteria to build trust in the fintech and digital banking space
By Digital News Asia March 10, 2023
- Collaborations that assure investors & customers of Boosts’ trusted nature
- Capabilities boosted by formidable track record and expertise of RHB bank
As demand for digital financial services rise with more customers turning to digital solutions for all their financial needs, trust is stated to have a positive correlation to adoption for most across Southeast Asia.
In tandem, integrity and communication are among the most ubiquitous predictors of trust in digital financial service providers. In terms of integrity, it is the perception of how reliable an organisation is, whereas communication refers to an organisation’s ability to effectively provide information in a responsive and transparent manner.
These aspects translate to an organisation’s credibility in the eyes of the public. In short, within the fintech and digital banking space, credibility is a key component to build trust, whereas integrity and communication are levers that build credibility.
Within Southeast Asia’s booming fintech landscape, one player stands above the rest in terms of market credibility – Boost, the regional full spectrum fintech arm of Axiata Group Bhd, and the winner of the recently granted digital bank license in Malaysia, alongside its consortium partner RHB Banking Group.
Over the past few years, Boost has been laying the foundation and building the essential blocks for a digital bank, such as through its AI-based lending business that’s already operating at scale.
Since inception, it has been financially empowering thousands of Malaysian and Indonesian MSMEs through digital micro-financing solutions and, as of 2022, it has disbursed over RM2 billion worth of loans across Malaysia and Indonesia. Of note here, is that over 40% of its customers had never received credit from any financial service providers before, or otherwise known as new-to-credit customers. Yet, Boost has enjoyed a 90% repeat rate on lending as well as healthy single-digit non-performing loan (NPL) rate in Malaysia and Indonesia.
This is a testament to Boost’s simple and conveniently available digital-first solutions, which incorporates a comprehensive e-Know Your Customer (eKYC) via a 5-minute digital application journey supported by AI and machine learning tools, with funds disbursement within 48 hours upon approval.
Furthermore, Boost’s reliability is also backed by RAM Ratings, as it is the first fully digital financier in Southeast Asia to secure an investment-grade A1 rating from RAM Ratings for its maiden tranche of Senior Class A Medium Term Notes (MTN) of securitised financing receivables. The rating from the leading credit rating agency in Malaysia underscores Boost’s capabilities and competencies in accelerating financial inclusion through its robust alternative data scoring frameworks. Its portfolio underwent thorough scrutiny and demonstrated soundness to meet its financial obligations.
Additionally, Boost also has collaborations that are able to assure investors as well as customers that it is a trusted partner which stands apart from other fintech firms. One such example is the signing of a memorandum of understanding for a potential digital bank guarantee with Credit Guarantee Corporation (CGC) Malaysia, a company dedicated to assisting micro, small and medium-sized enterprises (MSMEs).
The MOU encompasses two key parts: The first being a commitment to exploring extending a portfolio guarantee for the future digital bank's SME focused loans with CGC, and the second to collaborate with CGC in taking up referrals to provide financing for eligible MSMEs without collateral.
Hence, for Boost, its digital banking venture is not a greenfield experiment, but more of a brownfield venture where it aims to build on its incumbent advantage in the coming months.
In terms of the upcoming digital bank, Boost’s capabilities are also further backed by its partner, RHB, which brings to the table many years of established trust with customers and regulatory authorities, as well as proven expertise across key banking areas including core banking services, risk management and compliance, liquidity, capital, operational and responsible financing.
Since 2017, Boost had set out to trailblaze the fintech space by pioneering the ‘QR scan & pay’ as one of the first eWallets in Malaysia. The goal was to help MSMEs go cashless and bring users, especially the unserved and underserved, into the digital economy which resulted in the ‘QR scan & pay’ feature becoming mainstream in Malaysia.
Today, Boost has accumulated more than 10 million users and over half a million merchant touchpoints nationwide. They’ve been able to drive such a high digital adoption, especially amongst the underserved who traditionally aren’t as tech-savvy, through consistent and transparent communication, as well as education.
Five years down the line, millions of customers regionwide, comprising both users and merchants, are empowered by Boost, beyond payments, across its holistic fintech ecosystem of AI-powered digital lending business, award-winning all-in-one fintech app, merchant solutions platform, and cross-border payment ecosystem. Hence, Boost has established solid credibility with its customers built on trust, and is widely considered a frontrunner for its upcoming and much-anticipated digital bank.
As the fintech landscape continues to grow in Southeast Asia, with more than 70% of the population considered unbanked or underbanked, the opportunity is huge for fintech companies within the region to meet the needs of the underserved and unserved.
To drive adoption, fintech companies must first win the hearts and minds of customers by consistently building trust through credibility. The ones that earn and retain the trust of customers will have a clear distinct advantage to win and tap into the full potential of the Southeast Asian fintech market.