KUALA LUMPUR: CTOS Data Systems Sdn Bhd (CTOS), Malaysia’s largest credit reporting agency, has entered into a partnership with LenddoEFL to enable access to financing for Malaysian consumers with little to no credit history.
Both CTOS and LenddoEFL have aided banks, lending institutions, utility and credit card companies to reduce risk, increase portfolio size, improve customer service and accurately verify applicants.
“Although the predictive validity of credit scores on payment behaviour has improved over the years, a significant subset of potentially good borrowers is currently being denied access to credit because of lack of credit history,” CTOS said in a statement today.
These individuals find themselves financially excluded from the credit ecosystem and also unable to improve their credit scores.
The fintech firm hopes to change that with its ‘CTOS Non-Traditional Data Score’.
“By making full use of behavioural and digital data that consumers have provided explicit permission to use, CTOS and LenddoEFL will launch a universal credit decisioning platform capable of assessing the credit-worthiness of practically any Malaysian regardless of their credit history or lack thereof,” said CTOS Group CEO Dennis Martin.
“Moving forward, many individuals previously unserved by credit institutions based on their traditional credit risk, will have the opportunity to access credit,” he added.
With the exponential increase in smartphones and increasing access to the internet, these alternative datasets have more coverage and are more recent in nature than currently available traditional data.
LenddoEFL’s machine learning algorithms and artificial intelligence process the information once on a real time basis and when combined with traditional risk assessment policies, lenders can make more accurate distinctions between ‘non-traditional data’ consumers merely flying under the credit radar, perhaps due to lack of collateral or credit history, and others that pose an actual credit risk.
CTOS customers with existing credit histories also benefit from the implementation of this credit decisioning technology as pricing and cut-offs are influenced by the inclusion of alternative data.
“We are excited to announce our partnership with CTOS which delivers on our shared commitment to power leading financial institutions with cutting edge analytics and technology and provides millions of credit worthy individuals in Malaysia access to life-improving financial services,” added Richard Eldridge, CEO, LenddoEFL.