SINGAPORE - United Overseas Bank (UOB) has entered into an agreement with Beijing-based financial technology firm Pintec Technology Holdings to set up a joint venture company, Avatec.ai.
UOB will have a 60 per cent stake in the joint venture, the bank said in a regulatory filing on Monday (April 16).
Avatec will have an issued and paid-up capital of up to S$10 million and will be a subsidiary of UOB.
It will offer credit services and solutions, primarily in South-east Asian countries. In particular, it aims to tap data technology for credit assessment, scoring and selection, with commercial applications supporting micro, consumer and small and medium enterprise lending activities.
Avatec will launch its next-generation digital credit assessment solution in Indonesia, followed by other Southeast Asian markets within the next two years, the bank said at a press briefing on Monday.
UOB cited data from KPMG showing that only 27 per cent of Southeast Asia's 600 million people hold a bank account, suggesting that many people are still underserved in terms of accessing credit.
Dr Dennis Khoo, head of regional digitial bank and strategic initiatives, said during the press briefing that with the availibility of non-bank information today, banks can access about ten times the data points that they currently tap. These data points allow banks to extend loans to clients who previously did not have acess to credit, and at lower loss rates.
He said such a collaboration is likely the first for a regional bank, and is the first in a series of "groundbreaking digital initiatives" that will be launched by UOB in 2018.