Tokoscore Expands Scoring Alternative Products to Facilitate the Financial Industry Credit Analysis

Tokoscore, the provider company innovative credit scoring (ICS), which is affiliated with Tokopedia, launched the latest products called "Income Prediction" and "Fraud Flags". The presence of these two products is expected to facilitate financial service institutions in analyzing credit risk for prospective customers who have been unbanked using alternative data.

Tokoscore CEO Herman Widjaja said the various ICS products or services are expected to make it easier for strategic partners in the financial industry to assess the capacity and character of prospective borrowers to provide financial services to more Indonesians, especially those who have not yet had access to financial services.

He explained, with Income Prediction, Tokoscore can provide predictions of the income value of prospective borrowers to help strategic partners in the financial industry, such as banks or fintech, by assessing the capacity of potential borrowers. Meanwhile, Fraud Flags can provide information if a potential borrower has suspicious activity or behavior on the platform e-commerce.

"Tokoscore's products or services are assessed based on transaction activities and behavioral patterns of prospective borrowers on the Tokopedia platform, prioritizing the principles of security and personal data protection in force," he said, yesterday (15/9).

The two products above, he continued, complement the three products that have been released since its inception last year, namely Alternative Credit Scoring, to provide an assessment based on alternative data from prospective borrowers to strategic partners by analyzing the risk profile of potential borrowers. Next, Address Validation and Phone Validation, to provide data validation of addresses and phone numbers of prospective borrowers to assist the strategic partner verification process.

Herman emphasized that all products from Tokoscore only give results scoring to strategic partners, never in the form of specific data in order to maintain the confidentiality of prospective borrowers. Strategic partners can choose which products are needed, accessed online real-time, so that it can help make fast and accurate credit decisions.

Open access to capital for SMEs

Tokoscore Director Evita Soetjoadi hopes that the presence of this service can help local MSMEs get easier access to business development capital. Even the general public can more easily access financial services from strategic partners to meet their daily needs.

“World Bank data confirms that Indonesia is one of the five most populous countries categorized as unbankedpopulation. This is an opportunity for Tokoscore to carry out its mission, namely equal distribution of financial access to everyone through technology,” said Evita.

It is not stated how many companies have used alternative credit scoring services provided by Tokoscore. Evita only conveyed that, from the beginning until now, more and more companies, especially in financial services, such as BPR and BPD, have realized the need for alternative data to assess the feasibility of prospective customers.

"From our internal data, there is an increase in the data submittedassess by financial companies up to 40 times in 2021. As for the number of clients, it has tripled in the third quarter of this year.”

The company will continue to socialize this alternative credit scoring to various financial companies, including micro, so that they have competitiveness in the midst of this rapid digitalization.

Tokopedia itself is one of the leaders in the industry E-commerce in Indonesia. According to iPrice data, the average monthly visitor to Tokopedia's page reached 157,2 million in the first quarter of 2022. This figure rose 5,1 percent from the fourth quarter of 2021, which recorded 149,6 million visits.

This large data can be processed for good functions, one of which is to make it easier for financial companies to assess a person's eligibility before receiving credit. Alternative data used by Tokoscore to form an assessment, including the value of buying and selling goods on Tokopedia, relevance wishlist & categories of products purchased with loan requirements, conversations with shops, amount device, and much more.

The data is analyzed with AI technology and algorithms machine learning to obtain a risk profile analysis of potential borrowers.

The scheme is, if there is a financial service institution that is difficult to find the borrower's history in the credit bureau, Toko Score can be directly accessed by the team credit risk in the company. Various data points collected by Toko Score, is expected to help strategic partners get more comprehensive credit analysis results. This advantage is the strength of Tokoscore compared to similar players.

Credit scoring service continues to grow

Not only Tokopedia, a number of companies also continue to develop alternative credit scoring services. Recently Amartha launches Ascore.ai, a similar service targeted at Individuals and Institutions users. Amartha's scoring platform is built on a database of more than 1 million ultra micro entrepreneur partners existing in its ecosystem over the past seven years.

Previously startup ScoreLife also just debuted, after getting a pre-start funding of around 32 billion Rupiah. The startup, founded by industry veterans Ongki Kurniawan and Karan Khetan, offers an app to access and monitor credit scores, credit reports and other relevant data from national credit bureaus. In addition, a number of companies also offer similar solutions, for example Finantier, Pefindo Credit Bureau, CredoLab, Fineoz, Advance.ai, and others.

This alternative credit scoring service is needed, so that financial institutions can expand the scope of their prospective customers, especially for the public underserved -and unbankable. On the regulatory side, this model also has a legal umbrella in Digital Financial Innovation in the Financial Services Authority Regulation.