We recently spoke with ITSCREDIT CEO João Pinto. Founded in 2018, ITSCREDIT is a spinoff from ITSECTOR and is a fairly new player in the digital lending space. The Portugal-based company focuses on placing the consumer in control of the lending experience by making the entire process digital.
In this interview, Pinto talks to us about the digital lending opportunity, how his company fits into the current state of this fintech subsector, and what we can expect to see next.
Finovate: There is a wide range of borrowers out there– some who may not be comfortable on digital channels and others who are digital natives. How does ITSCREDIT adapt to this variety?
João Pinto: The main focus of ITSCREDIT is to evolve the lending process so that different types of customers can perform all lending origination actions using online channels. Our aim is that the customers can perform all origination operations online with minimum data input. We do this by retrieving necessary application information from various systems (personal data, financial data, and so on). Our approach to digital lending is to provide processes that are intuitive, attractive, simple, and fast in an online environment to revamp many of the bureaucracies often associated with traveling to the banks’ physical branches.
The customer can access the ITSCREDIT platform via online channels, such as mobile and internet. ITSCREDIT provides interfaces for other channels, as well, such as branch, contact center, and backoffice, which all have access to the client and their application process. This means that the client can start an application in any channel and get information or advice and can continue the process in any other channel. This way, more traditional users that are not as comfortable using digital channels can use traditional channels either in an isolated way, or– more interestingly– in a combined way. The multi-channel approach offers them full control of their application.
Finovate: How does ITSCREDIT underwrite credit risk and how does that approach differ from incumbent players?
Pinto: The ITSCREDIT platform contains four main modules: Flowcredit (Loan Origination), Calculators, Risk Analysis, Scoring, and Collections. Each can operate in isolation or can be combined in any way. Also, the platform is open so that implementations can use as much data as is available in order to have a more complete view of customers and their financials. We believe this is a huge strength of the platform. It allows banks to garner richer information for the risk analysis from both individuals and corporations (through Risk Analysis and Scoring modules), and also makes data available from credit applications processes (through Flowcredit).
In many situations our clients have, in the past, invested heavily in building their credit application analysis. The Flowcredit module easily integrates with such systems and then adds additional information and rules to make underwriting even more accurate and tailored to suit the financial institution needs.
Finovate: Tell us about the role that open banking plays in ITSCREDIT.
Pinto: As we mentioned previously, one of our strengths is that the ITSCREDIT platform is open so that implementations can use as much data as is available in order to have a more complete view of customers and their financials. In this scenario, open banking is a key element. It not only makes much more data available from different players, but also makes integrations much easier.
On the other hand, our platform is based on a services architecture, so that it exposes services that can be consumed by third party entities. For example, the use of calculators and loan origination components can easily be used in different commerce sites and therefore originate completely new lines of business for the institutions. For example, a travel agent can have a payment method on their website for their clients based on a personal loan.
Finovate: Looking broadly at the credit and lending industry as a whole, what changes do you anticipate 2020 will bring?
Pinto: In the past years we have seen financial institutions start to approach digital lending for their clients. This journey is still in its early stages, with few institutions providing such functionalities for a few products. We are sure, though, that in 2020 we’ll see more institutions adopting full digital lending with simpler models more adequate to their clients needs. The launch of PSD2 in Europe and other Open Banking initiatives around the world make it much easier to obtain personal and financial data from credit applicants and therefore make the loan origination simpler and faster.
The other area that we foresee a great expansion is through a space we refer to as dPOS (digital Point-of-Sale). A dPOS enables merchants to provide payment methods for their ecommerce platforms with digital lending, providing lower rates on credit cards for end customers and a lower cost and even extra income for merchants.
Finovate: What’s next on the horizon for ITSCREDIT?
Pinto: ITSCREDIT is a spin-off that will be 2 years old in May. We already have 13 clients on three continents: North America, Europe, and Africa. Our journey on the commercial side is to present the advantages of our solutions to more institutions and get more implementations.
In terms of product evolutions, we are enhancing the digital lending capabilities and models and launching new versions in 2020 for brokers and merchants.
Overall, our big aim is to position ourselves as a world-class player for credit solutions, providing innovative and modern solutions for our customers to help them differentiate from their competitors and become more efficient with higher loan volumes.
You can watch ITSCREDIT demo its latest technology on stage at FinovateEurope next month. Register now to save your seat!