The digital transformation of microfinance, in five steps
The best way to close a distance is to eliminate it. This is what is required if distance is what prevents one in every four financially excluded people from opening a bank account. The World Bank indicates that technology may play a key role in making financial inclusion a viable reality for everyone, which is why digital transformation is part of BBVA Microfinance Foundation's DNA. The Foundation aims to reach more people, regardless of how far away they live, and to provide assistance as efficiently and quickly as possible.
To meet this objective, the main endeavors of the Foundation, which is currently serving more than two million people in Latin America, are moving in this direction through processes which have been improved by technology.
1- Saying goodbye to paper
Until recently, hundreds of folders filled with thousands of sheets of paper, yellowing with age could be found taking up space in any office in any of the Foundation's institutions. Having done away with heaps of paper is possibly one of the most obvious benefits of the digitization. Field work carried out by more than 4,000 loan officers within the Foundation's six institutions has generated a huge amount of information — and paper —over the years. A practice that no longer makes sense. A practice that is becoming a thing of the past.
Thanks to the digitization of documents and new ways of working that have enabled loan officers to replace their notebooks with mobile devices, paper in the office is starting to disappear. The result is a reduction in environmental and economic costs. Additionally, loan officers have seen an impact on their day-to-day business: they no longer have to lug their files miles and miles to the home-based businesses of the entrepreneurs they are helping.
2- Information is a click away
Now, all the information that a loan officer needs — to give a loan or sign up a customer — is collected in a tablet or on a phone, whether there is cell coverage or not, and the data is uploaded to the cloud as soon as there is an internet connection.
This allows response times to be cut including to the extent of allowing an immediate response, given that the committee that evaluates the profile of the entrepreneur has all the information at hand. Also, the possibility of being able to access the track record of the customer from the mobile device improves the technical and financial support of advisors.
BBVA Microfinance Foundation loan officers visit the people they serve at their home-based businesses - BBVA Microfinance Foundation
3- The data owners
"Data owners" define what the data are and which criteria must be followed, given that they are the ones who consolidate parameters and share them with technological departments to create automated models that facilitate and speed up decision-making. This allows the 8,000 employees of the Microfinances Foundation Group, whether they be in Colombia, Peru, the Dominican Republic, Chile or Panama, to work with the same data.
Given that the microfinances model that brings financial services closer to the home-based businesses of entrepreneurs, loan officers can establish a relationship of trust with them. These visits allow purely financial information to be complemented by another level of knowledge of the customer: his/her expectations, goals and dreams…
All of this generates big data that allows the Foundation to better understand the entrepreneur, and offer him/her the products best suited to their circumstances and guide them in the best way possible.
4- The technological heart
To centralize all of these processes and data, the Foundation has developed a core banking system, a hub that technologically links all the units in the Group. This hub is the registry of all the products contracted by customers, their payment plans etc, in addition to any complementary information available.
This is also the meeting point for all of the platforms hooked up to the institution: mobile application for the advisor, that of correspondent banks, branches…
5- The future…
And ever more present is mobile banking. Particularly in Colombia, where entrepreneurs can already manage their money and monitor things through an application which already has 100,000 users registered and handles 8,000 transactions on average a month.
The BBVA Microfinance Foundation brings innovation to micro-financing and provides a service to those people who strive every day to break down the barriers of living far away and having less.