GoBear sees a ‘multibillion’ opportunity in bridging Southeast Asia’s credit needs

Southeast Asia’s 438 million unbanked may be a huge emerging opportunity for financial service providers in the region. Many continue to be excluded from formal financial systems because existing products – as well as the current assessment criteria in place – fall short of capturing their needs.

This is because customization has been slow to come to the financial services sector, which still largely adopts a cookie-cutter approach in the financial products that are being offered, GoBear CEO Adrian Chng tells Tech in Asia.

Photo credit: GoBear

GoBear is a “financial supermarket” where customers can compare and shop for over 1,800 financial products, across categories like travel, health and car insurance, credit cards, and personal loans. The company obtains a lead-generation fee for driving traffic to financial providers via its site and claims to have served over 40 million users since its inception in 2014.

There’s an opportunity for GoBear to work with financial institutions and to use the data it gathers to better tailor products to its users’ needs. The broader goal, Chng says, is to build up financial health and inclusion. And while boosting financial literacy – which GoBear’s comparison service already does – can help with this, improving overall health requires more than that.

“We are now getting alternative data, which is [from] behavior on our site,” he says. GoBear can get users’ digital footprints on their smartphones as well as their psychometric profiles via questionnaires. Using this data, the startup can analyze the price risk of each user or their credit-worthiness for financial service providers.

The inadequate access to credit is more acute in economically less-developed regions of Southeast Asia, where lower-premium insurance products should be an option. However, banks or insurance companies don’t provide these because of the overhead costs associated with them, Chng says.

But technology has the ability to change the status quo by reducing system-wide costs, in particular the costs of acquiring customers and risk. If the eligibility of potential customers can be more accurately assessed, the likelihood of a credit default can be reduced.

GoBear, which is backed by Dutch venture capital firm Walvis Participaties and financial services provider Aegon, wants to take that personalization one step further by creating financial products that meet new or unmet needs. “At the moment, what the consumer really needs, institutions don’t see. Using data, we can see where the right areas [are] to provide and meet the needs, and price for it,” says Chng.

Financial inclusion for all

GoBear operates in seven Asian countries, including Singapore, Hong Kong, Malaysia, the Philippines, Thailand, and Vietnam. Its latest market is Indonesia, which it entered in October last year.

Financial comparison sites like MoneySuperMarket and GoCompare are popular in Europe, particularly in the UK. One reason why those models work there is because financial services are more commoditized. For example, someone looking to sign up for a credit card may have hundreds to choose from, notes Chng.

GoBear CEO Adrian Chng / Photo credit: GoBear

“As a consumer [in the UK], you have a credit profile, open banking data – there’s a lot of information that a [financial services] provider can use to confirm who you are and assess or price your risk,” he shares. When a financial “supermarket” operator in the UK passes on a lead, the chances of a successful conversion are higher than it would be in Southeast Asia.

Using alternative data

An evolving revenue model