- Partners Credit Saison to to expand access to credit for Southeast Asia’s unbanked
- Inks partnership with Chubb to provide in-app insurance solutions throughout SEA
GRAB Inc, an on-demand transportation and fintech platform in Southeast Asia, and Credit Saison Co, Ltd, one of Japan’s largest consumer financing companies, on March 13 announced a joint venture to provide loans and lending services to millions of unbanked and underbanked consumers, micro-entrepreneurs and small businesses across Southeast Asia.
The joint venture company, Grab Financial Services Asia, will draw on Grab’s reach to millions of Southeast Asian consumers, micro-entrepreneurs and small businesses, and datasets on consumer behaviour, as well as Credit Saison’s expertise in credit analysis and consumer lending, to offer micro-financing products and services tailored specifically for Southeast Asia’s fastest growing economies.
The consumer lending venture was announced as part of the launch of Grab Financial, the fintech platform within the Grab ecosystem. Encompassing all of Grab’s fintech offerings, Grab Financial offers: payments services, rewards and loyalty services, financial services and agent services.
Building reliable alternatives to traditional credit assessment
At the heart of the new company’s offering is Grab’s ability to gather and analyse alternative data points on consumer behaviour, which can be used to develop sophisticated credit and risk assessments.
Only 27% of adults in Southeast Asia have a bank account, according to World Bank estimates, making it extremely difficult for banks to assess credit and risk ratings by analysing traditional data points such as bank account details, income and spending habits, or existing debt. This in turn restricts consumer access to credit.
Grab Financial Services Asia taps into Grab’s cache of customer data gathered from the Grab app, which processes over a billion transactions annually, to provide a sophisticated, alternative resource for measuring credit ratings.
By analysing behaviour and transaction data from the app, such as transport movements, geo-location, and GrabPay transaction data, the company can offer alternative data points to assess credit worthiness, filling the gap left by traditional credit scoring methods.
Using this data and Credit Saison’s expertise in credit scoring, risk management, and product formulation, the JV will offer a range of lending products and services.
In the early stages, the JV will focus on providing products to meet the needs of Grab drivers, agents and merchants, such as working capital loans, financing for smartphones and durable goods, as well as consumer goods financing.
In addition to providing its own financial products, in the near future the JV will also offer credit scoring services to financial institutes who can use the information to provide other services such as virtual credit cards.
Grab Financial Services Asia will also explore partnering with banks and financial institutions in Southeast Asia and globally to provide other financial products, enabling these traditional institutions to unlock new opportunities in segments that they have been unable to address due to the absence of reliable credit information.
“The new joint venture, Grab Financial Services Asia, puts in place a much-needed infrastructure that will accelerate financial inclusion in Southeast Asia. Many in our region have no access to loans that they can use to purchase a new home or grow their small business. GFSA is building a reliable alternative to traditional credit scoring methods that is customised for the unbanked majority of consumers and small businesses in Southeast Asia, which will create economic opportunity for millions across the region,” said Jason Thompson, managing director, GrabPay Southeast Asia.
Credit Saison CEO Hiroshi Rinno, said, “Grab is one of the most trusted and widely used platforms in Southeast Asia, with millions of people relying on the app every day, which gives it a highly valuable insight on consumer behaviour in real-time. This partnership opens up so many possibilities for Credit Saison, for Grab, and most importantly Southeast Asia’s unbanked and underbanked, and we are excited to get started.”
Credit Saison is the largest credit card issuer in Japan, with 35 million credit cards and 36 million pre-paid cards in circulation that bill US$62 billion annually. Its product portfolio includes unsecured consumer lending, shopping credit loans, mortgage loans, micro/auto insurance and leasing.
It is also an active technology investor, currently investing in wallets, e-commerce, payment gateways, mobile point of sale (mPOS), biometric payments, location-based marketing, Internet of Things (IoT) and robo-advisory.
In-app insurance for driver partners
Grab has announced a partnership with Chubb, the world's largest publicly traded property and casualty insurance company, to offer insurance solutions for Grab’s driver-partners.
Using the Grab app, drivers will be able to select different insurance options to protect their vehicles, their livelihoods and, ultimately, even their families, with access to loss of income insurance, per-ride schemes, personal accident policies and motor insurance.
The companies will also explore leveraging on data technology from Grab’s platform, including telematics, machine learning and predictive analytics to offer insurance solutions personalised to the specific needs of different private-hire vehicle drivers in Southeast Asia.
Thompson (pic, above) said, “At Grab, driver welfare is at the heart of our vision of improving the lives of people in Southeast Asia. We want to ensure our driver-partners’ hard work pays off and that their income and livelihoods are protected. We are excited to have a partner such as Chubb with whom we share this vision.
“Backed by Chubb’s global insurance expertise, we are now able to bring this app-based insurance product for the first time to drivers across Southeast Asia.”
Chubb Asia Pacific regional president Paul McNamee said, “We are delighted to work with a digital pioneer like Grab to protect their 2.6 million driver-partners. Our insurance partnership is evolving from traditional group personal accident coverage for drivers to more digital options directly offered from the Grab app.
“We will also work with Grab’s customer and partner-centric platform to introduce relevant, convenient and affordable digital insurance options in the eight countries where Grab operates. Overall, this partnership is an exciting step in our digital strategy to meet growing insurance needs in Asia Pacific.”
This new partnership is an extension of Grab’s long-term commitment to improve driver welfare. With Chubb’s help, the company expects to break new ground, making insurance more convenient and affordable for its drivers, with features like pay-per-ride options, one-click enrollment and claim payment via the app.
Chubb is committed to the digitisation of its insurance products and services to meet the needs of customers living, working and running businesses in the Digital Age.
The company is investing in product innovation, analytics and technology to provide a truly “anytime-anywhere” customer experience for its clients and distribution partners.
Chubb's capabilities range from simple easy-to-apply consumer insurance plans offered through social media and mobile platforms to artificial intelligence-enhanced decision support of underwriting and claims.
Digi partners Grab to bring more rewards for customers
Machine learning drives Grab's Open Traffic initiative
Grab leverages on Red Hat's technology to automate systems, meet demand