About
The digibank KTA Instan (or digibank Personal Loan) is a product that is approved under 60 seconds and disbursed on a real time basis.
Innovation presentation
Beginning 2017, DBS has been the first and only bank to launch Algorithmic Lending, extending our reach to avail loans to the unbanked/underserved in Indonesia by utilizing credit score models built based on alternative data. DBS then successfully launched digibank KTA Instan (Personal Loan) end 2018, an entirely digital loan providing customers instant credit decisioning and disbursement from their mobile devices.
We have moved from the physical paper loan application and manual processing to being 100% digital – from application, underwriting, disbursal and servicing. This symbolizes a transformational change for the traditional loan business for many remain heavily reliant on a tedious underwriting process.
Previously, underwriting has been limited to customers with credit bureau records which has traditionally been deemed to be the ultimate proxy for credit assessment. With our digital loan, DBS can now extend its coverage to the unbanked and underserved segments (i.e. customers with AND without credit bureau records) by using alternative credit scoring models (i.e. leveraging on Telco scores based on mobile usage, location, billing etc.) to assess customers’ credit profile. Using AI and Machine-Learning capabilities, this loan digitalisation project enabled DBS a new and innovative way of calculating credit risk and massively reduced the loan application Turn-Around-Time (from 5-7 working days to 60 seconds for customers getting the Approval in Principle, and an additional 15 minutes for disbursement). Today, DBS processes loan applications 24/7, significantly reducing lengthy approval waiting time. This brings certainty to our customers’ loan journey for they now know instantly their possibility of approval and can gain instant access to funds.
Uniqueness of the project
Loans Approval in under 60 seconds
digibank KTA Instan was built with the intent to better customer journeys and create a streamlined process from loan application, underwriting to loan disbursement. To do so, DBS embarked on two major projects:
1. Collaborating with a local telco partner to develop Algorithmic (Algo) Lending, which aims to target underserved segments by using alternative data to build credit scoring
2. Building a full digital loan process, starting from identifying customers’ pain points through a series of customer immersion programs to gathering research, developing the customer journey and constantly enhancing features based on the research outcomes. Lastly from there, we built the system architectures using API connectivity to support a more seamless and instant process.
Extending credit to the unbanked & underserved
Through this new digital loan product, DBS has opened a new market addressing the underserved segment’s loan needs which consequentially helps to improve financial inclusion in Indonesia.
