How one of the first non-bank financial credit companies in Việt Nam changed consumer lending

With the rapid growth of the consumer finance industry in Việt Nam, the need for seamless and pleasurable customer experiences is increasing and thus the need for innovation is felt more than ever. FE CREDIT has remained the leader not only in market share, but also in providing the best services to its customers using technological solutions. 

FE CREDIT’s efforts in this direction have been recognised once again, this time by Ernst & Young(EY), the world’s leading advisory services provider in assurance, tax and transactions.

The consumer lending industry in Việt Nam has been seeing remarkable growth. According to a report by the National Financial Supervision Commission, which advises the prime minister on matters related to financial markets, consumer lending in Việt Nam has been growing fast since 2015, with growth rate at 65 per cent in 2017 compared to 50.2 per cent in 2016 and with the percentage of consumer lending in total credit rising to 18 per cent in 2017 from 12.3 per cent in 2016.

In this context, various players, both domestic and foreign, are eyeing a slice of the market. Banks and corporations have opened consumer credit units, and many foreign consumer credit companies have come to Việt Nam, either setting up greenfield ventures or acquiring existing players. With so many players in the market, the consumer experience still leaves much to be desired.

FE CREDIT, originally founded as the Consumer Finance Division of Vietnam Prosperity under Vietnam Prosperity Joint Stock Commercial Bank, was established in 2010 and was one of the early players in the market. As of 2018, FE CREDIT had served more than 10 millions Vietnamese across 63 provinces and cities nationwide with a wide range of products consisting of personal loans, durable consumer loans, two-wheeler loans, credit cards and insurance.

In China and India, many consumer lending companies have launched a complete digital process for loan application, approval and disbursement, taking only 10 to 15 minutes for customers to receive the money. FE CREDIT recognised that if it can provide a similar process in Việt Nam, the benefits would be two-fold customers would gladly adopt the FE CREDIT app, and the cost of operation for FE CREDIT will be reduced.

The lending platform for the $NAP app was created by integrating through APIs a host of digital technologies and FinTech solutions on a flexible workflow solution guided by a versatile rule engine. It combines new technology with traditional lending science without any compromise on KYC(Know Your Customer), verification, underwriting, compliance or customer service.

The platform digitises the entire customer journey (or lifecycle) from application through a mobile device to receiving disbursal through a bank account or retail outlet (in cash) and allowing them to service the loans up to termination through the same device. This eliminates human intervention at all stages of the lifecycle, as opposed to only in onboarding. The technologies incorporated on the platform, beyond the ability to support Vietnamese language and script, include features such as facial recognition, AI-based optical character recognition (OCR), a voice based virtual assistant, speech to text, device-based scoring, eSignature support and more.

Though the EY team had experience launching a similar digital lending app in India, the challenge in Việt Nam was unique as most documents required in the lending process such as IDs, utility bills and pay slips are still stored in paper form.

Over the course of four months, the EY team from India advised FE CREDIT on industry best practices in application design, vendor selection and prototyping.

$NAP was launched in August 2018, enabling customers to fill out a loan application, receive approval and disbursement within 24 hours. As of May 2019, the app had more than 1,000,000 downloads. FE CREDIT is leading the pack in acquiring customers at a speed never imagined before.

By eliminating traditional paper-based applications and face-to face KYC procedures, this platform decreased the risk of losing a lead due to inconvenient and time-consuming procedures, and thus reduced the cost of acquiring and on-boarding customers for FE CREDIT.

The ASEAN Financial Innovation Network (AFIN) initiative of the International Finance Corporation (IFC) has recognised the platform as a ready-to-use, highly suitable demand-side use case replicable across markets by partner financial institutions (FIs) to complement their supply-side platform. In addition, the FE CREDIT platform can integrate with the AFIN platform when the latter is ready.