FE Credit, the largest provider of consumer loans in Vietnam, embarked on digital transformation in 2018. Now that its app has got the downloads, it needs to convert these into sales.
So it is exploring adding chatbots to the customer experience, with a view to onboard a fintech vendor that combines self-learning conversation with a deep understanding of the lender’s business.
For Basker Rangachari, the firm’s chief marketing officer in Ho Chi Minh City, the necessity of introducing chatbots is also changing his role. Marketing is becoming part of business development, not just a cost center.
That’s because fintech vendors can develop a framework for what a customer discussion might sound like (a “skeleton” he calls it), but any software will need the bank’s content and experience.
“Content has to be programmed, so we are working with the team behind our loan-origination app,” Rangachari said. “None of the vendors have the full picture, so we will still need a master architect.”
FE – “fast and easy” – Credit is a wholly owned unit of VPBank. It was spun out in 2015 and has grown through a traditional, physical distribution model. It now has 8,000 points of sale throughout Vietnam with 12,000 agents that help sell consumer loans to low-income people. The agents are stationed at places that sell to these consumers, such as motorbike dealerships and shopping malls.
Its target users are 25-35 year old blue-collar workers or entry-level white-collar workers who earn less than $1,000 a month. (Parent VPBank caters to more affluent depositors.) Consumer loans with zero down or delayed-payment plans are the gateway financial service for many Vietnamese. FE Credit also offers credit cards and third-party non-life insurance, particularly health and critical illness.
It launched a digital transformation last year as a means of taking an already fast-growing business and accelerating that growth. Millennials are the largest cohort in Vietnam’s 97 million population, and they are fully employed and mobile-native. “There’s a huge demand for the consumer lifestyle, just like in China 15 years ago,” Rangachari said.
First comes the app
Digitization began with the launch last August of a mobile app called Snap, to sell loans. Customers input their mobile number to fill in an application, while the software verifies them against a national identity database and credit bureaus. An Indian fintech, HyperVerge, provided the facial recognition software to evaluate the applicant’s selfie.
The approval process takes about 15 minutes, and the loans can either be immediately transferred to the user’s bank account, or forwarded to the nearest post office in cash.
EY, the consultancy, helped with the design while the rest of the tech was assembled from a variety of fintechs; Rangachari says the firm had considered using one large vendor such as Oracle or IBM, but found them too slow.
Initially the app attracted about 500 downloads a day, but it now receives around 6,000 to 7,000. The company white-labeled its app for comparison site GoBear, which is now a major sales channel. But doing digital hasn’t meant the end of human sales. In particular, each new customer requires a telemarketing call, to convert those engagements into sales. Same for retargeting potential customers with new offers.
Then comes the follow-up
But as volumes increase, the telemarketing team can’t reach everyone, so FE Credit is now looking to integrate chatbots into the process.
“Digital adoption needs humans to help,” Rangachari said. “Artificial intelligence lets us get to the customer quickly.”
The firm is currently evaluating chatbot makers. Many of these operate script-based chatbots, which don’t really count as A.I. Rangachari says he wants chatbots that can self-learn, and that can interact with users who follow FE Credit on social media.
The firm has 1.2 million followers across Facebook, Zalo (the country’s answer to WhatsApp) and other platforms. Rangachari’s goal is to grow that to 10 million followers, giving the firm a big audience to promote educational content and, in the future, special offers.
In addition to the loans app, the firm has also introduced Digicard, a virtual credit card delivered by mobile phone. The company is the third-largest credit card issuer in Vietnam, issuing 1.2 million Mastercards in 2018. But physical delivery of plastic is unreliable in Vietnam, while e-commerce is growing. So now FE Credit issues everyone who is eligible a virtual card, and premium customers get a plastic version as well.
The firm is now looking at ways to digitize its bancassurance business too.