In the light of the emergence of financial technology and rapid development of the digital economy in the Asia-Pacific region in recent years, it has become crucial for traditional financial institutions to learn how to use such technology to improve their efficiency and customer experience, as well as reduce risk. At the same time, developing new financial businesses and protecting the data security of enterprises and users has also become a top priority.
Hong Kong – a major influential financial market in the Asia-Pacific region – has also experienced unprecedented changes in recent years. The local government has spared no effort in fostering the development of financial technology with the aim of securing and raising Hong Kong’s status as a financial center in the region. Against the backdrop of reforms and changes in the financial industry, traditional financial enterprises, as well as those in other industries, also face the challenge of improving their efficiency and customer experience.
As far as information service providers are concerned, the question is how to help Hong Kong financial institutions handle such challenges, while also helping them to seize the opportunities presented by fintech and the big data economy. Experian, a leading global information service company, has unequivocally given its affirmative view. The company offers one-stop-shop services which are also customisable. It is also able to lean on its localized products and services as well as innovative practices to help industries face challenges head-on.
One-stop-shop services to help the all-round upgrade of industries
Financial institutions have increasingly higher requirements for information services in the light of efforts to digitize the industry. An effective strategy management platform, assessment of fraud risk and data security protection services are indispensable services for every financial institution and its related enterprises. However, few, if any, service providers can provide independent solutions or products for all three aspects, thereby meeting financial institutions’ need to build a one-stop-shop service system. “We are pleased to announce that Experian is able to provide customers a one-stop-shop service solution. It combines three products to help customers improve operating efficiency while also reducing risks,” said Ken Ng, Sales Director for Decision Analysis and Marketing Services of Experian Greater China.
Automatic strategy management platform PCSM helps enterprises make smart decisions — “In this era of big data, financial institutions require powerful automatic and smart decision-making engines to help them effectively and rapidly deploy third-party data. The engines must also possess strong data standardization and integration capability to optimize decision-making and full use of expanded data to supplement such decisions. Their aim is to ultimately raise customers’ rate of investment return. In this context, PCSM is one such effective solution,” said Ken.
PCSM (PowerCurve Strategy Management platform) is a flagship product of Experian used worldwide for 25 years. It is used in decision management for credit loans throughout a customer’s life cycle and contains numerous platforms and functionalities, including application review and approval, customer management, collection management, strategy management, monitoring and optimisation, and data management. With the PCSM platform, traditional financial institutions can handle credit card and loan applications more effectively since they are processed automatically. This improves efficiency and customers’ experience, while avoiding financial institution risk.
The overall result is enhanced returns. Presently, banks of substantial scale in Hong Kong, Taiwan as well as domestic and international banks, including CTBC Bank, have begun using Experian’s PCSM system. Apart from traditional banks, many new-style financial institutions such as fintech companies and virtual banks are also actively procuring Experian’s relevant services to improve their efficiency regarding credit loan and credit card approvals. This allows them to compete with traditional financial institutions. These types of new-style financial institutions essentially rely on the Internet to handle their businesses, thus achieving a high-efficiency operation without the manual means to process them. As such, a mature and reliable system is hugely important. Additionally, the company’s vast experience in global implementation helps support Experian’s decision-making engine. Therefore, fintech companies can use the market-tested template as a foundation before adjusting it to suit their business needs, thus enabling the rapid and effective operation of the automatic strategy management platform.
Fraud risk assessment helps prevent fraud risk and increases profitability — Experian’s FraudNet is an industry-leading fraud detection and prevention solution, helping banks and corporations, such as e-commerce operators, fintech companies, credit and online loan operators, and insurance companies whose daily businesses involve electronic transactions, effectively detect fraudulent activities across different accounts. It enables them to rapidly identify and lock in such risks to make more precise and effective decisions. While FraudNet avoids interfering with genuine applications, it also enables companies to make accurate forecasts of fraudulent behavior through collecting and analyzing user information, thereby reducing the potential for fraud attacks as well as institutional risk. At the same time, it enhances customers’ experiences and increases companies’ profits. Additionally, FraudNet is customisable according to the timing and characteristics of group attacks. It undertakes association analysis at the back-end for customers to identify fraudulent applications and transactions quicker and easier. FraudNet’s proprietary patented technology can easily differentiate fraudsters from ordinary applicants, thereby preventing fraud without affecting customers’ experiences.
The CSID system effectively solves data security problems — Personal data protection is an issue that urgently needs to be addressed by business operators, not least in the era of big data. According to a Bloomberg report, in October 2018, Cathay Pacific Airlines suffered a major data breach involving the personal data of as many as 9.4 million customers. The airline’s management was worried that nefarious sources would take advantage of the stolen data, resulting in huge losses. The data breach put Cathay Pacific Airlines under enormous social pressure. To protect its customers’ personal data and uphold its brand goodwill, Cathay Pacific Airlines partnered with Experian, using the CSID system to monitor its customers whose information was leaked. A technical network was deployed so that as soon as there were signs of leaked personal data being offered for sale or any other irregularity, the customers involved, and the airline would be immediately notified and precautionary actions, such as a password change, would be taken. In extreme cases, accounts were closed to prevent additional loss. CSID is a newly-launched product of Experian and is used in prevention of data breach, offering daily 24-hour, 7 days a week, monitoring and protection of data. Experian also provides training and consulting services to customers in data protection. Put simply, the product can help customers nib frauds in the bud, thereby reducing risk.
Compared with using multiple services, Experian’s strategy management platform PSCM, coupled with fraud risk assessment solution FraudNet and data protection product CSID, can help companies alleviate the problems of switching vendors. They offer a one-stop-shop solution to help companies transition smoothly and quickly in the era of new finance. Take a customer in the finance industry, for example. After adopting Experian’s one-stop-shop solutions, the financial institution can use FraudNet to determine the potential risks in certain applications or transactions. Upon receiving the assessment results, the PCSM decision engine automatically recommends a credit limit, interest rate, and approval decision. Once the applicant becomes a customer, the financial institution can use its decision-making engine to conduct periodic credit risk assessments and marketing activities. At the same time, and to maximize its profit and data risk management, the financial institution can use CSID to monitor the account. If CSID uncovers irregular transactions or suspected fraudulent behavior, the financial institution can take steps to protect its – and its customers’ – assets from being tampered with or lost.
Flexible customisation service
Every financial institution differs from others with respect to industry nature and business targets. Therefore, service providers must take into full account the needs of different enterprises to provide flexible customisation services. The service provider requires an in-depth understanding of its customers’ needs and market background. It must then freely configure the respective systems and software parameters based on its customer’s requirements, thus helping the latter achieve their business targets.
Experian is an excellent example. If a bank or loan-disbursement institution wishes to bear greater risk by disbursing more loans to raise its profitability, this requires corresponding adjustments to PCSM and FraudNet. The effect is liberal access to loans, and the bank or institution will achieve its desired targets. The parameters of such targets can also be adjusted according to the institution’s target customers. For example, regarding PCSM, the parameters for personal loan users and corporate loan users would differ. When disbursing personal loans, the PCSM system will set the loan limit according to the individual’s work, income and risk, whereas when disbursing corporate loans, the PCSM system will collect the company’s registration information and information such as turnover and use them as the basis of its decision.
As these types of services require a significant amount of information from the company and the public, the product and service provider must take its customers’ need for data sensitivity into account by ensuring maximum protection of the customers’ data. Experian’s service system, which includes PCSM, FraudNet, and CSID, offers flexible options to customers. Therefore, customers with an independent data center can use Experian’s solutions in their own data center. An example of this is CTBC Bank in Taiwan. However, considering the high cost of building data centers, Experian also offers cloud-based services for customers. “We hope to offer more diverse proposals in the future to meet the divergent needs of fintech companies and virtual banks to ultimately break the economic barrier and promote industry growth,” said Ng.
Localisation efforts to spur innovation and upgrading
In recent years, the Hong Kong government has spent considerable efforts upgrading the financial industry. It actively drives the development of fintech companies and virtual banks, adopting forward-looking policies and a relatively liberal regime, which has resulted in an influx of similar types of companies. Plus, foreign companies seeking to enter the mainland market choose to test the waters in Hong Kong first, which subsequently drives the growth of fintech companies in Hong Kong. While this presents market opportunities for information service providers, it also causes fierce market competition.
Experian has been in Hong Kong for more than 20 years. With its broad international reach and extensive customer coverage, Experian has accumulated deep insights into the Hong Kong market. Furthermore, Experian has been providing services to customers in many countries and regions around the world, incorporating insights obtained from its past experience into its corporate culture and products. As such, Experian can offer its customers in Hong Kong a full range of products and professional consulting services.
It’s easy to see how an information service enterprise rooted in the Chinese market and with a stable corporate structure in Hong Kong, Taiwan and many cities in Mainland China, is capable of rapidly responding to customers’ needs.
In the future, the traditional financial industry in Greater China will continue to transform, and the development and upgrading of the emerging financing industry will be well underway. Therefore, the personal data of many consumers will require further protection. Against this background, information service enterprises must continue to support financial institutions with professional services to help these institutions upgrade and optimize in a smooth and orderly fashion.
Ng indicated that Experian has set up a research center in Singapore. The company will continue to improve its PSCM, Fraudnet and CISD systems by expanding user scenarios. It will also use AI technology to increase efficiency and reduce both costs and risks.