Juvo has unveiled its ‘Financial Identity as a Service’ (FiDaaS) technology suite, which builds financial IDs for underbanked people by utilizing alternative data sources such as mobile phones, along with incremental data generated from direct-to-consumer lending.
According to the World bank, 3.9 billion adults (around 68% of the global population) have no credit history, which is one of the biggest barriers to financial inclusion. One-in-five adults who are excluded from the financial system blame this on their inability to provide the necessary personal information. Not only are underbanked consumers unable to demonstrate a credit history, they are unable to account for their financial behaviour at all.
In turn, financial service providers cannot accurately calculate the risks attached to these new customers because of a lack of information about their past financial behaviour. Consequently, their default answer is “no”.
Juvo says the financial identities available from its service will allow these people to qualify for financial services from financial institutions and merchants, often for the first time.
Mobile plays a key role in the service – many if not most people with no formal credit history do have a mobile phone subscription. And even though these subscribers typically pay with cash, purchases of mobile services create a history of financial transactions that are recorded digitally and associated with a single person.
By working with mobile operators, financial institutions and merchants, Juvo says it is able to access a wealth of alternative data in the form of everyday mobile transactions and interactions and use machine learning technology to establish financial identities. Over time credit is extended and potentially a wider range of financial services are provided, creating a richer and more rounded financial profile.
Juvo says its FiDaaS platform not only helps consumers establish a credit history, but also benefits the overall ecosystem. Mobile operators cam maximize existing cash flows and open new revenue streams from data monetization and financial services. Financial institutions can expand the addressable market for financial services while minimizing risk. Meanwhile, merchants will be able to serve more consumers as well as decrease abandoned and declined transactions.
Juvo’s FiDaaS platform currently updates 5.6 billion data points every single day for 200m consumers on four continents. The platform utilizes global cloud infrastructure and technologies such as Lambda architecture that enables FiDaaS to ingest and structure both real-time and batch data at scale. These data points help to close the information gap that prevents institutions from trusting creditworthy consumers, purely due to insufficient data.
“There is huge inefficiency in the global economy because underbanked consumers lack a financial profile. Not only are individuals locked out of essential financial services, preventing families and businesses from dealing with unexpected emergencies and planning for long term goals, financial service providers are unable to serve credit worthy customers,” said Steve Polsky, Founder and CEO, Juvo. “FiDaaS is designed to underpin a new global credit infrastructure to include those that have been financially excluded but use a mobile phone.”