MyBucks believes it is the only fintech business in Africa to make use of credit technology supported by an in-house artificial intelligence (AI) team.
MyBucks is a German-listed FinTech company that holds three brands – GetBucks, GetSure and GetBanked – and says its partnership with NGO Opportunity International aims to bring financial inclusion to the unbanked and underbanked in emerging markets, particularly in Africa.
In a move that is contrary to the current trend worldwide where banks are acquiring fintech companies to add value and expand services, the partnership marks the first time a fintech company has acquired banks to bridge the gap between the virtual and traditional worlds of banking.
The conclusion of the acquisition of four banks and two microfinance institutions from Opportunity International will add Ghana, Tanzania and Mozambique to MyBucks’ country portfolio.
Megulatory approval has already been granted in Kenya, Tanzania and Mozambique.
This will increase its customer base to 1,5-million, and will also more than double its assets. Most importantly, this acquisition gives MyBucks access to funding in local currencies, which significantly reduces FX risks.
Dave van Niekerk, CEO of MyBucks, comments: “The collaboration is truly revolutionary in that it is the first time an international NGO and a leading fintech company in Africa are joining forces to help clients break the ongoing cycle of poverty.”
The partnership will allow both organisations to actively pursue virtual financial inclusion across the continent, where digital and mobile banking are the only realistic path to banking the unbanked and underbanked in these markets.
MyBucks believes it is the first, and currently only, listed fintech business in Africa to make use of credit technology, supported by an in-house artificial intelligence (AI) team. For the micro-finance industry, van Niekerk believes predicting whether or not someone can pay back a loan is arguably the most critical role that AI can play.
The MyBucks technology team has developed a cloud-based proprietary software solution called FinCloud that is both an interface to customers and to the internal loan management system.
By integrating with secure, disparate third party applications, FinCloud is able to access customers’ bank statements and bank accounts at application date, to better assess creditworthiness and assist the collection process.
This means that FinCloud, together with MyBucks’ internally developed self-learning credit decision and scoring system, provides the core technology platform for our products and services.
This credit decision and scoring system works to continuously learn customer behavioural patterns from historical loans and is able to very accurately predict a customer’s probability of default for a particular product at any given time.
The underlying algorithms take a number of factors into account such as behavioural data, transactional data and employment information.
The system assigns a unique credit score and determines a probability of default, which in turn drives a unique credit offering to the client, by adjusting the loan amount, term and interest rate.
This gives the company significant visibility and predictability in assessing the creditworthiness of its customers, which allows it to implement efficient and rigorous risk and credit management procedures.
Since November 2015, the scoring system has already made more than 1,5-million predictions.
MyBucks is currently also investigating ways to use classification or grouping algorithms within AI to identify fraudulent behaviour and are in the process of developing facial recognition algorithms as part of the fraud prevention system. Here the development of its internal AI fraud detection module supplements the functionality provided by the credit decision and scoring system.
Going forward, van Niekerk says MyBucks will continue to refine the process of banking, building credit and accessing other short-term financial services, adding to its ability to address clients in even the most remote areas of Africa.
“Through the partnership we will leapfrog all competitors as well as promote sustainable and responsible lending practices, that not only derive a satisfactory return on investment, but allow for meaningful CSR and community projects to be realised,” he says.