Mon, Nov 12, 2018 – 5:50 AM
UOB has taken big steps this year to increase its investments in data analysis, and plans to build a digital bank which will better capture the first mobile requirements of the next generation of customers.
Denis Ko, head of digital banking and digital banking at UOB, said that the rise in financial companies – or "techines" – blurs industrial lines and redefines the way the bank deals with customers.
"The advances in technology and innovation will continue to change the banking landscape." In Asean, as the new digital generation comes of age, there will also be customers who are the first mobile savvy who expect this banker's experience Digital First. "
In August, UOB said it would start a digital bank "targeted, mobile only" in its major markets Asean.
The bank said it would leverage its partnership with Personaletics, an investment announced last month in July, to increase AI-based solutions by offering insights deeper than huge transaction data volumes to help identify individual transaction patterns.
UOB has a minority stake in Israeli company Prentix, and has joined banks and other international investors, such as the Spanish lender, Banco Santander, in an investment in Finch.
The AISA proposal is designed to help identify specific transaction requirements, enabling UOB to provide clients with real-time training and personal guidance on their financial decisions.
The bank said that this service includes customers' expectations and motives when their balances are insufficient to cover future payments, detect unusual or suspicious account activity in their accounts, and urge them to save more or invest wisely.
"These insights will be used to provide customers with real-time, customized and insightful guidance that will help them improve the way they save and perform and help them make better economic decisions," said Dr. Kou.
With this partnership in place, UOB will look to design a digital bank that will create "simple, transparent and engaging experiences" for its customers.
"The availability of rich transaction data allows us to do so, through our partnership with Personaletics, we can use their cognitive banking capabilities to help identify patterns and generate insights from the data."
Dr. Cohen added that Personaltics' computerized learning capabilities also enable the bank to refine how it communicates through UOB's digital bank, so it is customized by behavioral segmentation.
At the forefront of credit evaluation, the bank is also deploying AI and analyzing data to raise their accuracy and efficiency while evaluating the credit quality of potential customers.
UOB's investment in Personaltics came after the establishment of a joint venture, Avatec.ai, in April of this year. Avatec's credit evaluation tool also uses AI to determine the applicant's credit quality in seconds.
UOB set up Avatec with Beijing based Pintec Technology Holdings. The bank holds 60% of the shares of Avatec, while Pintek holds the remaining 40%. UOB plans to invest up to $ 12 million in Avatec in the next two years.
Pintec, which charges a fee for each use of its credit evaluation model, uses nontraditional data points such as utility bills, call history and spending patterns to determine if potential borrowers are able to pay. It also taps into retail chains to offer loans at the point of sale.
Avatec's credit evaluation tool is expected to be deployed across Asean over the next two years.
"Avatec's joint venture of AI-driven credit assessment capabilities allow us to serve a wider base of Southeast Asian customers, such as customers who may have new credit as well as those that are below zero," said Dr. Ku.
Meanwhile, the bank has used AI to boost the credit underwriting engine driven by regional analysis. In March, he said that since the implementation of the credit underwriting engine improved, the bank recorded a 50 percent reduction in the default rate of its small business loans.
It also cut the delivery time and the number of steps involved in loan application by more than half.
The improved credit engine, developed in-house, was first issued in Thailand in 2015. An engine-enabled analytical has since been rolled out in Singapore, Indonesia, Malaysia and Vietnam.
UOB said it integrates the existing sources of information from the bank with new data repositories, such as those related to the company's current operations.
The bank looks at the performance of the entire industry, and whether the borrower has succession plans in place. For certain segments, such as ecommerce merchants, this will include their customer ratings. The engine also analyzes information from government databases.
Dr. Cohen said: "We believe that the way banks use these new technologies to leverage their data is the key to providing customers with simpler, smarter and more engaging banking experiences."