Asia Blockchain Review recently spoke to Geoffrey Prentice, Co-Founder of Oriente, an innovative technology and data science company committed to unlocking financial inclusion for underserved communities in emerging Asia through digital and O2O (online-to-offline) financial solutions built around mobile technology. Prentice talked about using technologies from AI and machine learning to big data analytics in order to provide real-time credit scoring and on-demand lending to customers in emerging markets, as well as the company’s projects such as their digital finance platforms and building a stronger VC ecosystem in Southeast Asia.

Asia Blockchain Review: What was your inspiration for founding Oriente? What is your vision for the company?

Geoffrey Prentice: During my time (as a founding partner) at Atomico, we were looking at various deals and opportunities, not just in Europe but around the world, and of course, in Asia too. At the time, one of the companies we watched closely was Ping An and, more specifically, comparing the success rates of venture capital firms against Ping An, the parent of Lufax (now Lu.com). What we found was that only about 15% of Atomico’s portfolio companies were successful, compared to Ping An’s 75%. 

When we dissected why, we understood their ‘secret sauce’ to be recruiting the best talent in the world, access to a copious amount of capital, and a captive user base ripe to be exploited. A pretty simple formula, but one that is hard to bring together and deploy.

I was keen to see where this could be applied effectively, and I knew it had to be somewhere in Asia. More specifically, Southeast Asia, where economies are cash-based and home to more than 10 percent of the world’s financially excluded individuals — some 400+ million who have been left behind by the limits of traditional financial institutions, but are mobile-savvy and clamoring for change. 

At Skype, we quickly realized there was a unique opportunity to change how people communicate. Here, we realized there was a huge financial inclusion problem that had to be solved for millions of unbanked and underbanked consumers. We quickly realized that no one was looking to build a viable and scalable solution to the problem — a smart financial services infrastructure designed to unlock economic opportunity and value for consumers and merchants. And that became the purpose and mission for Oriente. 

In 2017, I co-founded Oriente with Hubert Tai, formerly founding COO & CTO at Lufax, and Lawrence Chu, founder of BlackPine Private Equity. 

ABR: With your experience co-founding Skype, what “lessons learned” have you taken to this new venture? 

GP: We believe in profits with purpose. One of my key learnings being part of the founding team at Skype was that it is important to be solving a real problem and have a strong social purpose. This mentality is ingrained in the ethos of our company and everyone who works in the organization. 

We’re building solutions designed to empower and improve the financial health of millions in communities that have been left behind by the limits of traditional financial systems. We have a big responsibility to do that in a meaningful manner that ensures long-term sustainability, both for the future of the people we serve and the growth of our company.

Here are some of the key lessons from Skype that have been tremendously useful during this journey building Oriente:                                                                                                                                      

• Have a strong social purpose. Skype revolutionized communications for people who wanted to be connected with friends and family no matter where they were. At Oriente, we are deeply committed to using technology to unlock financial access and ignite economic opportunity for more people. 
• Try to solve a problem, not just build a product. Understanding the problem and solving for it allows our solutions to have true human impact and longevity in the 21st century, where industries are seeing evolution at lightning speed. 
• Be agile and flexible. As a startup, it is critical to have a vision and work towards it. However, it is equally important to be humble and ensure you build agile teams that can quickly adapt and evolve. Fintech as an industry is evolving at an unprecedented pace, and at Oriente, we had the foresight to be able to plan for a lot of the developments and ensure our teams at a regional and local level were able to adapt quickly to evolving market requirements.   

ABR: Can you tell us about the technologies you use to provide real-time credit scoring and on-demand lending to customers in emerging markets?

GP: At Oriente, we firmly believe that alternative data has the potential to unlock enormous economic value! Only 31% of the adult population globally is covered by credit bureaus. In markets where bureaus are limited or non-existent (like the Philippines and Indonesia), our technology deployed through our fintech platforms (Cashalo in the Philippines and Finmas in Indonesia) can use non-traditional data to build financial identities — introducing millions of underserved consumers to the formal economy.

Our technology apparatus looks at social connections, location data, and personal identifiers amongst others. These signals serve as a proxy for traditional data, helping us verify identity and develop robust credit and risk assessments and filling the gap left by traditional credit scoring methods and lenders to accelerate financial inclusion.

We believe that by helping individuals create what essentially becomes a financial passport, we can help unlock access to better, more accessible, reliable, and secure financial services for everyone. 

ABR: What criteria does Oriente’s AI technology use to determine creditworthiness? 

GP: We have a simple goal: to deliver fast, convenient, and secure access to affordable credit for millions of underbanked and underserved consumers and small business owners across the ASEAN (Association of Southeast Asian Nations) market we operate in.

Our technology solutions are designed and built with the needs of consumers in mind; understanding that a large proportion of the underbanked are digitally-savvy and are looking for fast and reliable financial solutions is key to our offering. 

Oriente is using deep-learning technologies to do the underwriting of consumers in Southeast Asia. Our systems combine next-generation technologies with proven offline systems to mitigate the risk of fraud and delinquency. By focusing on simplifying and digitizing financing for consumers, we aim to build a more digitally inclusive ecosystem.

Our proprietary solution harnesses the power of artificial intelligence, machine learning, and anti-fraud algorithms to determine an applicant’s creditworthiness within minutes. The data that we look at includes social connections and personal identifiers. These signals serve as a proxy for traditional financial data, helping us verify identity and assess creditworthiness.

Every individual is evaluated according to the same criteria in a fully automated method by our algorithms. Factors such as gender, race, or other discriminatory factors do not impact the score as might be the case if a human were involved in making the lending decisions. We hear firsthand from customers that they are more comfortable being scored by a machine since it means that the in-person biases of bank lending officials will not come into play. As an example, gender bias in lending is a well-researched phenomenon that excludes women from access to formal capital in many markets.

ABR: What are your own credit rates, and what happens if people cannot pay back your money?

GP: At Oriente, we are using world-class technology to build financially inclusive solutions that help underbanked and unbanked consumers build financial identities and participate in the formal economy. For many, it is their first time. These are individuals who have previously been credit-invisible — ignored by traditional financial institutions. We measure everything we do by whether it meets the needs of an aspiring lower-middle class that has been undervalued and underserved for too long. 

Typically, a consumer in our demographic needs access to finance for a specific purpose. Very rarely is it just to have cash-in-hand. Mostly, it is to fund their small business or purchase an item to help improve their lives or the livelihood of their families. Our approach is “purpose-based,” designed to help these individuals do just that.  

Our rates for our pioneering O2O (online-to-offline) consumer financing or digital credit solution range from 0-4%. The technology infrastructure we have developed is designed to mitigate risk. In these markets, the biggest challenge is actually fraud, not delinquency. 

ABR: How do you alleviate the danger of people becoming further indebted by using your services to buy simple consumption goods instead of meaningful investments for education, career, or homes?

GP: What we have seen is that in these markets, there are millions of underserved consumers that suffer from being credit-invisible and, as a result, are borrowing from informal lenders. For example, just in the Philippines, over 40% of adults turn to informal lenders for credit. These funds are then used primarily for consumer goods rather than invested in things like education or insurance, because they are obtained under predatory terms, exorbitant interest rates, and often heavily collateralized. 

For us, the first step is to invest in financial education and literacy for the communities and markets in which we operate. These are markets in which the financial literacy gap is desperately low, around 24-35%. So, we actively work to deploy financial education programs to upskill a vast population on the basics of financial services at various touchpoints. This includes proactively educating consumers about how and when to use the new financial tools that fintech provides and the advantages and risks that come with it. We believe that building a culture of responsible behavior is important, not just for the long-term sustainability of our business, but the industry as a whole. 

Second is ensuring that our smart technology infrastructure is constantly improving and is able to give credit to hardworking individuals who deserve it and are able to unlock real economic value by accessing it through our platforms. 

Our data, gathered from millions of interactions, shows that the majority of our consumers are young working women buying household items and microentrepreneurs looking to grow their small businesses. This is very encouraging, as women are proven to be more responsible borrowers.

What we are not going to do is ignore a vast population of consumers who are responsible and need to consume basic goods, but are having to do so under extremely onerous terms through informal lenders. We’re committed to building the right infrastructure to serve these undervalued communities with responsibility. 

ABR: Access to venture capital is still the key issue faced by startups and regulators alike. As a global VC expert, what advice would you give to stakeholders in Southeast Asia to help build a stronger VC ecosystem?

GP: The great thing is that this is already happening. These things take longer than you think, but we’re already seeing a great deal of progress. If you look back at when we started Skype in Sweden, there wasn’t much except for us. But now, you have a number of amazing companies like Spotify, Klarna, and TrueCaller. Same with Estonia, where you have companies like TransferWise and Taxify. Similarly, we’ve had a lot of people from Skype go on to build and invest in other great companies. 

Simply put: success begets success. These talented people broaden their network and collaborate with other successful people. The growth of that network becomes critical. The tools are everywhere to do it. The key point is that you are able to interact with these people and make it happen. That’s the thing about Silicon Valley — everywhere you turn, you are running into very talented and ambitious people who are already building something as well. That not only provides you with an incredible talent pool, but also, for an entrepreneur, the belief that they can actually make it happen. 

Lastly, is the actual capital. But that is coming too. Once you are able to attract more talent, especially those that have been successful, the money will come. We are seeing that already in Southeast Asia’s burgeoning startup scene, which is now attracting great people, investors, and investment from China and Japan to the United States.

ABR: How is Oriente transforming microlending in Southeast Asia? Can you tell us about some of your current projects?

GP: As digital becomes more mainstream, technology today has the potential to serve as a key transformation agent across the financial services sector. At Oriente, we are building a smart, fair, and reliable financial services infrastructure with technology at the core to help millions of unbanked people, underserved communities, MSMEs (micro, small, and medium-sized enterprises), and large businesses ignite opportunity and unlock their economic potential. We decided to be infrastructure-focused because, in these markets, it is advantageous for everyone if we give the full-stack; we’re not in the business of burning money on subsidies. By using a mix of traditional methods and next-generation technologies, we are able to develop and deliver innovative financial services. Our services help millions of ‘credit-invisible’ people build financial identities and access credit and other bespoke financial solutions based on richer, data-driven analytics.

Currently, we have developed and launched two mobile-first fintech platforms, Cashalo (in the Philippines) and Finmas (in Indonesia) that help consumers build financial identities, access secure and affordable credit, and participate in the formal economy. For the merchants we partner with, our alternative low-risk platforms provide a new way to reach a huge, underserved consumer base that is clamoring for more control and transparency. Since we launched these platforms a little over 12 months ago, we’ve already served over 2.5 million consumers and helped over 1.5 million build their financial identity. 

We see the potential for Oriente to be the technology and data science company that is powering every individual’s financial passport across Southeast Asia’s fastest-growing economies. As we look into the future, we are actively exploring how blockchain technology could bring further efficiency and transparency to financial services and the O2O ecosystem in emerging Asia.