*Claudio Pasqualin
The Brazilian population has already reached the mark of 217 million inhabitants. Our country is the largest economy in Latin America and is among the largest GDPs in the world. After almost three years of experiencing the Covid-19 pandemic, we can expect that advances in relation to the financial inclusion of a large part of the population, with fewer opportunities and financial resources, will be driven from 2023. Here at TransUnion, we have it almost like a mantra the concept of “Information for Good®”. That is, how can we (through the use, analysis and intelligence of data) be another vector of financial inclusion to bring possibilities and access to credit.
A study by TransUnion Brasil found that 33 million Brazilians still do not have access to banks in the country. In addition to this huge portion, there is yet another layer of the population that, despite being banked, has little access to products and services offered by banks. In a country like ours, with a territorial extension of around 8.5 million square km, a single bank branch often covers several municipalities. Now, imagine having to travel 50km to go to an agency to request credit or some other banking product whenever necessary.
The digital transformation has expanded the opportunity to access credit or a digital checking account, facilitating risk analysis and expanding possibilities for this population.
Even among people considered banked (who have an already established relationship with banks), there are still many who have not created the habit of consuming and enjoying complementary services. In addition, many banks still do not offer a wide range of services through digital means. Among them, insurance policies, vehicle or property financing, health plans, and other services that are already common offers for the population that relates in greater depth with financial institutions.
With the socioeconomic impacts of the Covid-19 pandemic, digital transformation gained speed in the world market and in Brazil. Companies were suddenly forced to accelerate the digitization of their processes and offerings in order to reach consumers in social isolation in their own homes. In the same period, internet sales grew rapidly. This scenario, unlike any other we have ever experienced, boosted the access to banking services for a portion of the population with little or no credit history in the market, and, until then, invisible to risk analysis processes: the non-serviced.
We can classify as underserved people who have only one type of credit product (or no more than two accounts of the same type), and have been active in the credit market for at least two years. These are the consumers I mentioned earlier who do not take advantage of all credit services — even with an active bank account — such as loans, financing, consortia, credit cards, among others.
In the global study by TransUnion “Strengthening Financial Inclusion: A Deeper Perspective on Underserved and Underserved Credit Consumers,” We also see that, in Brazil, 41% of unserved respondents plan to apply for credit, compared to 39% of underserved respondents. The percentage of both groups indicates that there is a real need and interest in credit. Finding ways to serve these people represents a significant growth opportunity for lenders. Remember our mantra I mentioned: Information for Good®? So, our market vision results in a virtuous cycle, providing both the growth of the creditor and the expansion of the visibility of consumers hitherto underprivileged of offers and accesses based on data analysis. This means helping to improve the quality of life of this part of society, boosting financial inclusion for a new life. But how to reach this part of the population? Through data analysis.
Promoting financial inclusion will improve by understanding the different groups that exist within the same population. It is necessary to understand the credit risks of these groups, through the evaluation of their consumption profiles. These scenarios vary greatly, which directly changes the way to reach these people. While traditional credit granting models use data such as financial history, many players lack information about non-serviced customers. By linking positive data, such as a consumer's credit behavior, to alternative data, new avenues are opened. Whether optimizing a decision-making process or accurately modeling various data — which, in turn, expand opportunities for financial inclusion and access to credit — the movement to add these people to the market certainly has a lot to contribute to the boosting the Brazilian economy.
*Claudio Pasqualin is Vice President of Solutions at TransUnion Brasil
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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