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In order to achieve this, Alliance Bank is enlisting the assistance of CTOS to upgrade its retail loan origination system (RLOS) capabilities with a credit transformation project.
Alliance Bank group CEO Kellee Kam said the project will help banks increase loan approval performance and evaluate the unbanked and underbanked segment of society.
This segment would include consumers whose traditional credit history is so limited that they do not have credit scores and easy access to credit.
Reaching this untapped market will give Alliance Bank a head-start in the proposed expansion of its consumer banking segment to target the HENRY segment (High Earners Not Rich Yet).
The bank has targeted to grow its retail consumer loan book by 1.5 times to RM36 billion in the next five years.
Currently, a mortgage loan typically takes around five days to be approved. With the RLOS, Alliance hopes to shorten the approval process of loans to within two days, and unsecured loans within just one hour.
The RLOS helps consumers know whether they have met the criteria to receive the loan and is able to reach them faster, which allows for quicker loan dispersal.
Kam highlighted three key features of RLOS – using data analytics to offer credit to traditional customers that may have fallen out of current lending guidelines; using alternative credit scores to help borrowers who might otherwise be automatically denied because they don’t qualify for traditional credit scores; and offering the best possible user experience.
The new loan origination system will be built on a platform developed by JurisTech, the fintech company that CTOS acquired a 49% stake in 2022. JurisTech specialises in bringing about digital transformation for banks.
The new loan origination system will also be embedded with CTOS solutions such as CTOS Application and Decisioning, CTOS eKYC and CTOS Score. The project is scheduled to be completed within two years.
At market close, Alliance Bank’s share price fell 0.9% or three sen to RM3.32, valuing the company at RM5.14 billion.
Meanwhile CTOS Digital’s share price rose 0.69% or one sen to RM1.45, valuing the company at RM3.35 billion.
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