Zurich Finance Corporation

An Oradian customer success story

When this specialist Philippine financial institution digitalised its operations, the results were fast and spectacular with loan defaults falling by 50%.

Challenges

  • Poorly enforced loan policies
  • Core banking system preventing growth
  • Operational inefficiencies
  • Lack of internet connection in rural and remote areas

Results

  • Loan default rate cut by 50%
  • Scalable and affordable core banking system
  • Real-time updates and business intelligence
  • Data entered into app by field is uploaded once connectivity is restored

About Zurich Finance Corporation

Motorcycles only became popular in the Philippines in the 1990s but today they outsell cars by a ratio of four to one and an estimated 18 million Filipinos ride them. Motorcycle sales are big business which is why SEC-registered Zurich Finance Corporation (ZFC) partnered with the Venture Motorcycle Sales Corporation to provide financing options to its customers in the rural South Luzon area of The Philippines.

The challenges

ZFC quickly proved itself to be a successful business with a promising future, but it faced three main problems:

1. Scalability

How to scale up? The business had reached the limit of what could be done with its existing core banking platform leaving no opportunity to grow.

2. Inconsistent operations

ZFC’s loan policies were not being applied consistently across the organisation. Decentralised operations had led to loan policies being interpreted or applied differently from location to location and was unmanageable. The loans monitoring system relied on manual processes and a combination of spreadsheets, emails, and phone calls to manage things. The process needed centralising and digitalising.

3. Internet connectivity

Areas of South Luzon often suffer from slow internet speeds, intermittent connections, and some places have no service at all. Even areas with good access can have it temporarily wiped out thanks to a flood, typhoon or earthquake.

The man tasked with addressing all these problems was Ronaldo Recto, a Managing Director of ZFC who is currently President of the Rural Bank of San Antonio, part of the same family of companies.

The solution

Ron had come across Oradian while at business school and he remembered that Instafin, our cloud-based core banking system, was designed specifically to cope with the challenges of rural and remote conditions. He made sure Oradian was one of the companies invited to discuss the project.

“We went through the process of evaluating the core services, benefits, and partnerships, and quickly drew up a shortlist, finally selecting Oradian,” he recalls.

Scalability

Instafin solves scalability challenges in multiple ways. First, there are literally no barriers to growth – Instafin is as capable as supporting a major bank as the smallest microfinance institution. And because it is hosted in the cloud, you never have to buy extra servers or bandwidth to accommodate your growth – everything is taken care of by Oradian in the cloud. Instafin is also the most affordable way to grow – the subscription price you pay is based on portfolio size and there are no hidden extras.

Inconsistent operations

“One of the major improvements was the way that we could implement loan policies over a larger area because of the way Instafin is designed,” says Ron. With customers having to complete mandatory fields when applying for loans, local officers were unable to intervene with tailor-made and unauthorized concessions.

Internet connectivity

It was Oradian’s Customer Success team that first drew ZFC’s attention to the potential of the Instafin Field Officer App (IFOA) to deal with the absence or unreliability of internet connectivity. Originally designed for use by field officers in micro-finance institutions, Oradian customised the app for use by ZFC’s credit investigators to validate information submitted by loan applicants. Credit investigators prepare their risk assessments and photographs the client’s assets in remote offline locations, knowing that as soon as their smartphones reconnect to the internet the information will automatically be uploaded to the Instafin core platform. From there it is accessed by the credit assessment team in the corporation’s head office.

The results

“The default rate went down by 50%”

The most dramatic effect was a rapid decline in the number of customers defaulting on their loans. “The default rate went down by 50% because we were able to implement consistent loan policies,” says Ron. He admits the scale of the improvement was unexpected. “We were surprised by the figures because we were primarily dealing with very risky customers,” he says.

Operational efficiency has improved vastly in many respects. Recording repayments, for example, used to involve many stages to ensure proper oversight. “With Instafin, the repayment is booked and that’s it. It’s posted in real time and there’s no other process,” he says.

The automatic syncing procedures have also overcome the problems of poor internet connectivity, streamlining workflows and greatly improving the day-to-day running of ZFC’s business. Making accurate credit assessments is now much quicker and easier.

Working with Oradian

Ron says one of the things that distinguishes Oradian is our proactive determination to help ZFC to develop. “One of the things that we like to talk about with your Customer Success team is how we can constantly improve and address operational challenges. Your support for our growth is one of the things that convinced me that Oradian was a very good choice of partner,” he says. “The totality of the Oradian and Instafin service is more than the sum of its parts.”

Subscription pricing

“The totality of the Oradian and Instafin service is more than the sum of its parts”

Ron says one of the things that distinguishes Oradian is our proactive determination to help ZFC to develop. “One of the things that we like to talk about with your Customer Success team is how we can constantly improve and address operational challenges. Your support for our growth is one of the things that convinced me that Oradian was a very good choice of partner,” he says. “The totality of the Oradian and Instafin service is more than the sum of its parts.”

Security and the cloud

Some financial institutions are uncomfortable with the idea of their data being stored in the cloud rather than on-premise, despite the obvious advantages in terms of cost and reliability. Ron has no such qualms but he understands where the reluctance comes from. “You feel safer if you can see something,” he says.

“You feel safer if your money is under your bed or your files are in a hard drive. But if you think about it, your bed isn’t safer than a bank. Most car owners don’t know how to fix their own cars, but it doesn’t necessarily mean they’re not a good car owner,” he says. “You just need to trust in your partnerships and entrust the storage of data to the cloud service providers.”

The future

Ron is now President of the Rural Bank of San Antonio (RBSA) where he is continuing to enable growth and improve efficiency with the help of Instafin.

“When Zurich partnered with Oradian it was like a test run for the RBSA board to consider whether this cloud-based system could be used within a more highly regulated environment”, he says. “Rural banking is a very traditional industry and there are there are a lot of hurdles to get over when approaching new technology which is why it took us a long time to make the assessment, but we are finally able to partner with Oradian.”

“Digitalization is really an investment in growth,” says Ron. “If you want to grow, you need to digitalize. The two go hand in hand.

The power of Instafin

scalable

Grows with your business.

affordable

Economical, subscription pricing with no surprises.

cloud based

No servers and infrastructure to buy and maintain.

flexible

Customise at the flick of a switch.

low bandwidth

Designed for customers even in remote and rural areas. Works with 2G.

easy to integrate

Plug in third-party applications instantly using our powerful APIs.

Get in touch with Oradian today. Email us at hello@oradian.com and take the first step on your journey to growth.