Credibility: A Key Criteria To Build Trust In The Fintech And Digital Banking Space

As demand for digital financial services rise with more customers turning to digital solutions for all their financial needs¹, trust is stated to have a positive correlation to adoption for most across Southeast Asia².

It is also found that integrity and communication are amongst the traits that are the most ubiquitous predictors of trust in digital financial service providers. In terms of integrity, it is the perception of how reliable an organisation is, whereas communication refers to an organisations’ ability to effectively provide information in a responsive and transparent manner³.

These aspects translate to an organisation’s credibility in the eyes of the public. In short, within the fintech and digital banking space, credibility is a key component to build trust, whereas integrity and communication are levers that build credibility.

Within Southeast Asia’s booming fintech landscape, one player stands above the rest in this aspect – Boost, the regional full spectrum fintech arm of Axiata Group Berhad (Axiata), and the winner of the recently granted digital bank license in Malaysia, alongside its consortium partner RHB Banking Group (RHB).

1. Proven Integrity

Over the past few years, Boost has been laying the foundation and building the essential blocks for a digital bank, such as through Boost’s AI-based lending business that’s already operating at scale.

Since inception, it has been financially empowering thousands of MSMEs through digital micro-financing solutions and, as of 2022, it has disbursed over RM2.5 billion worth of loans across Malaysia and Indonesia. Not only that, over 40% of their customers had never received credit from other financial service providers before, or otherwise known as new-to-credit customers, based on previous study. Yet, Boost has about 90% repeat rate on lending as well as healthy single-digit non-performing loan (NPL) rate in Malaysia and Indonesia.

This is a testament to Boost’s simple and conveniently available digital-first solutions, which incorporates a comprehensive e-Know Your Customer (eKYC) via a 5-minute digital application journey supported by AI and machine learning tools, with funds disbursement within 48 hours upon approval.

Furthermore, Boost’s reliability is also backed by RAM Ratings, as it is the first fully digital financier in Southeast Asia to secure an investment-grade A1 rating from RAM Ratings. The rating from the leading credit rating agency in Malaysia underscores Boost’s capabilities and competencies in accelerating financial inclusion through its robust alternative data scoring frameworks. Its portfolio underwent thorough scrutiny and demonstrated soundness to meet its financial obligations.

Additionally, Boost also has collaborations that are able to assure investors as well as customers that it is a trusted partner which stands apart from other fintech firms. One such example is the signing of a memorandum of understanding (MOU) for a potential digital bank guarantee with Credit Guarantee Corporation (CGC) Malaysia, a company dedicated to assisting micro, small and medium-sized enterprises (MSMEs)⁴.

The MOU encompasses two key parts: The first being a commitment to exploring extending a portfolio guarantee for the future digital bank's small and medium enterprises focused loans with CGC, and the second to collaborate with CGC in taking up referrals to provide financing for eligible MSMEs without collateral.

Hence, for Boost, its digital banking venture is not greenfield, but more of a brownfield venture, and it aims to build on its incumbent advantage in the coming months.

In terms of the upcoming digital bank, Boost’s capabilities are also further backed by its partner, RHB, which brings to the consortium many years of established trust with customers and regulatory authorities, as well as proven expertise across key banking areas including core banking services, risk management and compliance, liquidity, capital, operational and responsible financing.

2. Commendable Communication

Since over five years ago back in 2017, Boost had set out since day one to trailblaze the fintech space by pioneering the ‘QR scan & pay’ as one of the first eWallets in Malaysia. The goal was to help MSMEs go cashless and bring users, especially the unserved and underserved, into the digital economy which resulted in the ‘QR scan & pay’ feature becoming mainstream locally.

Today, Boost have accumulated more than 10 million users and over half a million merchant touchpoints nationwide. They’ve been able to drive such a high digital adoption, especially amongst the underserved who traditionally aren’t as tech-savvy, through consistent and transparent communication, as well as education.

Today, five years down the line, millions of customers regionwide, comprising both users and merchants, are empowered by Boost, beyond payments, across its holistic fintech ecosystem of AI-powered digital lending business, award-winning all-in-one fintech app, merchant solutions platform, and cross-border payment ecosystem. Hence, Boost has established solid credibility with its customers built on trust, and widely considered a frontrunner for its upcoming and much-anticipated digital bank.

As the fintech landscape continues to grow in Southeast Asia⁵, with more than 70% of the population considered unbanked or underbanked⁶, the opportunity is huge for fintech companies within the region to meet the needs of the underserved. To drive adoption, fintech companies must first win the hearts and minds of customers by consistently building trust through credibility. The ones that earn and retain the trust of customers will have a clear distinct advantage to win and tap into the full potential of the Southeast Asian fintech market.

References:

¹ Visa: Nearly 70% of Malaysians SMEs Are Keen on Using Digital Bank’s Services

² Understand the Role of Trust in Digital Financial Services in SE Asia

³ Digital Financial Services for Financial Inclusion in Southeast Asia

⁴ Axiata Digital inks MOU with CGC for potential digital bank guarantee

⁵ Fintech continues to be a hot sector in Southeast Asia after a booming 2021

⁶ The rise of fintech in Southeas Asia

This content is provided by BOOST Malaysia