United Overseas Bank (UOB) is setting up a fintech joint venture Avatec with China’s Pintec to serve the unbanked population across the region.
UOB will hold a 60 percent stake in the JV and Pintec the rest.
The new entity’s goal is to assist banks and financial companies in making more efficient and accurate credit assessment decision to better serve their customers, including those who have never enjoyed credit services.
Avatec aims to provide next generation smart credit assessment and decision-making solutions for institutions that provide financial product and services. It uses non-traditional, extensive, multi-dimensional data analysis and technology such as AI, machine learning, and anti-fraud algorithms. The results of a complete credit evaluation and decision would be done in a matter of seconds.
Dennis Tan, President of Avatec, said that the strength lies in the combined forces of UOB’s more than 80 years of service from individuals and corporate customers in Southeast Asia, married with Pintec’s financial and technological strength, which establishes Avatec with a wealth of deep insights and experience coupled with technological superiority, to give companies opportunities for business growth in the region.
Avactec aims to create smart financial products that include consumer segments, encompassing commercial institutions such as e-commerce, retail and tourism in its consumer base.
The strategic investment in Avatec is the starting step for UOB in 2018 to pioneer a series of digital project as said by Dr. Dennis Khoo, head of regional digital banking and strategy at UOB.
Avatec will first set foot in Indonesia, followed by expansions into other Southeast Asian markets within two years.
According to the 2018 Indonesia Banking survey by PWC, fintech investment was still relatively low, among technology investment for Indonesia banks in 2018. Only 22% of bankers listed fintech in their top-3 areas for investment in the coming year.
According to the same survey by PwC, only 6% of respondents anticipated a significant disruption from fintech for 2018, but that number spikes to 28% when viewed over a 5-year horizon.
