Can Financing be Empathetic?
Your soul would hope yes. But How?
Empathy is tricky. It is vital yet doubtful to put in practice. In Life & In Business.
But it is also Empathy that drives what is incredible: Collaboration & Compliance.
Without Empathy we can’t get People to comply and willing to take actions needed to achieve any objective.
Summer 2021 when Vietnam Covid Lockdown has intensified, we started to see more of our Customers struggle to pay back the installment. Background: We are (EasyGop) providing personal financing service (0% interest so we don’t call it a Loan, legally) to the underbanked segment in Vietnam & we need to collect pay back monthly from them.
If you were my Customers, would you pay back if you get calls & harassed daily to pay pay pay?
And if you see Mafia gangs bang on your door?
QUIT. (They can’t even go outside during Military Lockdowns so I don’t care!)
And If they do, I would be furious just like my Ancestors kicking ass Capitalists & start a war with my Lender.
But I need to collect.
I need Compliance, not War with my Customers. So I did the unheard of in the market, as a Startup
I allowed my Customers to choose the deadline they think they can pay me back.
To a different user segment (who are just slightly behind the payback schedule), I automatically extend their Maturity Date to 14 days.
Within 2 weeks, people decided to pay us back the entire amount they owed (which means they decide to settle early, “tất toán”) without any penalty fees.
We saved at least 50% Value At Risk as the months go by.
The Morale of the Case study?
My People do have intention to pay.
They just need to be treated with Respect, Empathy, & Transparency.
My People vs Fraud are two different groups.
One that is qualified
One that is NOT.
You approve the Wrong ones, you can’t even collect with Fear. (If you do, you’d better get protection yourself)
The Job is to identify who is the Right one to approve.
With technology & data, we can underwrite faster (in minutes, almost instant) & more reliable (multi-sources, holistic analytics).
Empathy can scale with Technology advancement. Intelligent underwriting encourage Affordability not Consumerism.
Consumer-centric: Empathy, Transparency & Respect as Foundation.
We invest in FinTech so that we don’t have to apply Medieval practices to 21st century distribution of Consumer finance products.
With Buy Now Pay Later or any Consumer Finance Businesses (Banks, Lenders) these core values should be honored.
Otherwise, we all move backward, not forward.
__ This short reflection is a perspective of a Viet Fintech Founder whose startup journey is new & passionate beyond preexisting criticism of any typical startup models (Scale, Risk, etc). I simply believe My People deserve better Customer Experience regardless of what Product they buy & who they buy from.
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