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Country Manager of Branch Financial Services (BFS), a digital technology savvy financial institution in Nigeria, Maria Rotilu has opened up on the chances of ‘branchless banking’ outsmarting physical traditional banking as soon as possible.
Since the emergence of financial technology (Fintech), traditional banking operators have been jittery on the possibility of turning the table of financial services in their disfavour even though Fintechs must run on their backbone after all.
She averred that BFS has disrupted the financial services space in Africa by replacing physical branches and traditional underwriting processes with a proprietary machine learning algorithm to make lending decisions. For us, there are two reasons why we think Branch has seen such success here.
Business Hilights recalls that GMSA Intelligence recently predicted that there will be more than 400 million new smartphone connections in Sub-Saharan Africa by 2020, bringing the mobile install base to more than half a billion users.
This factor encouraged the Country manager of BFS to posit that “We believe that Nigeria will be a massive part of this growth. The African market has seen accelerating rates of smartphone adoption in recent years mostly driven by dropping smartphone prices and growing internet penetration”.
To her, the success is not unconnected with “The the market factors” as “Nigeria has seen accelerating smartphone adoption; a high appetite for world-class financial services; and an increasing acceptance and propensity to use mobile financial technologies”.
Explaining how BFS operates, she said “With the explicit permission of our customers, we use data science to analyze smartphone data to determine loan eligibility. Our machine learning algorithms process thousands of data points to create personalized loan options in a matter of seconds. This allows us remove the need for physical meetings, collateral or paperwork. We do not need to physically see users to give loans”.
According to her, “To use Branch, all customers need to do is download Branch from the Google Play store. It takes just seconds to sign up, add your information and select an offered loan amount and terms. Application takes just a couple of clicks and approval happens in minutes. Funds are then deposited straight to a customers’ bank account. With Branch, there is no paperwork, no guarantors or collateral and no hidden charges or late fees. Branch currently offers loans through the app, such that Nigerians irrespective of location can apply for loans between, 000 – N150, 000 and get a loan sent to their bank account in minutes.
On how Branch App works, Rotilu said “It’s simple. Any Android smartphone user can access to loans between N3, 000 and N150, 000 naira via the Branch App. On Google Play, search for the Branch App and download the app. Apply for a loan. Once approved, your loan will be sent to your bank account in minutes. This all happens in minutes, without a physical meeting, paperwork, or collateral”.
“Some users get funds in their bank account minutes after applying. At Branch, with the user’s permission, we analyze smartphone data to determine a personalized loan option for the user. Our machine learning algorithm processes thousands of data points to create personalized loan options including: GPS data, call logs, contact lists, handset details, SMS logs, and social network data.
Giving further insights on data privacy, Rotilu averred that “Data protection and privacy is paramount for our business and something we care deeply about. We use world-class data security and encryption techniques to protect our customer’s data. We use smartphone data to determine loan options. That data is then encrypted and protected. Branch never shares our customers’ data or information with third parties unless it is for dedicated business purposes, such as reporting defaulted loans to authorized credit bureaus”.
On customers’ loan repayment process, she noted that from the assessment of data points which informs a credit decision, “the vast majority of our customers repay their loans on time and take secondary, often larger, loans”.
However, “In the case that a user doesn’t repay, we reach out to the user to find out why and urge them to repay. We do not charge late or rollover fees. There are several easy ways one can repay. Either through the app, repaying through your bank account, ATM, or cash at the Bank if that is the user’s preference. We have several channels to which users can easily repay.
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