Abigail is a seasoned consumer finance executive with over 20 years of expertise in consumer lending, specializing in credit, collections, operations, and business management of loans and credit cards. She is a certified Six Sigma Blackbelt with a strong track record in deploying Six Sigma tools for problem-solving and process optimization.

In a conversation with The Global Woman Leader Magazine, Abigail shares her views about the evolving landscape of consumer credit and lending. She highlights strategies for adapting to these changes, reassessing risk management, and leveraging data analytics. Abigail also emphasizes the role of financial literacy in shaping future consumer finance.

In the current consumer finance landscape, with fluctuating economic conditions and evolving regulatory environments, how do you see the role of consumer credit and lending adapting over the next few years? What strategies are you employing to navigate these changes?

There will be some caution among the present lenders amidst the uncertain economic conditions and the evolving regulatory environment. Some may shift to “phygital” – a combination of offline-online lending to lessen delinquencies, and some may tighten criteria, lending more to existing clients rather than to new borrowers. However, despite the fluctuating economic landscape, I still see the entry of several digital lending players, particularly in the Philippines, as the basic economic fundamentals still look good. As for SB Finance, we have identified the segment and target market that we want to focus on, a space where we can serve our clients within our risk appetite,and come up with innovative solutions that mutually benefit our clients and our company.

Given the shift towards digital-first interactions, how are consumer expectations evolving in terms of credit management and loan services? What new trends are you observing in consumer behavior that are influencing your strategic decisions?

Overall, with the prevalence of digital platforms, I think consumers expect more seamless UI/UXexperiences frominteracting with financial companies, to availing their financial services. We have seen the shift in channels of where they want to be contacted, from mainly voice to non-voice, specifically two-way chat channels.

As for credit management, most are still not financially savvy,succumbing to informal lenders and other lenders with very high lending rates rather than trying to find out how to borrow at lenders with lower interest rates. Borrowing from informal lenders or digital lenders require very little to no requirements but interest rates can also be very high. Hence, behavior is towards convenience rather than looking for the best deal. This is prevalent in the Philippines where consumers have limited awareness of how their credit rating affects lending, sometimes to the extent of not caring about their credit standing at all. Hence, financial education is a must especially for the mass segment where access to funding is crucial.

For SB Finance, we just started our financial literacy program, which will be rolled out to our employees and to our clients and partners. We believe in responsible lending, hence, the focus on this endeavor. For our business, our market will always have a need for borrowing,but what’s crucial here is how to lend responsibly, and to lend to the right customers at the right time. That is where we concentrate our strategies, whether we invest more in digital channels, AI-driven credit models, or our offline sales channels.

In light of recent economic uncertainties, how are you re-evaluating risk management strategies for consumer loans and credit cards? Are there any emerging risk factors that you believe will become critical in the near future?

Credit risk management is very crucial in the consumer lending business so we leverage the expertise of our stakeholder,Krungsri, for their long and solid experience in consumer credit. They have given us the sound foundation and the framework to manage risk properly in good and bad times.Aside from the proven credit management strategies, we are also leveraging on technology, particularly AI. In the world where speed and bespoke solutions are necessary, these types of technology give us the speed to serve the market, and the efficiency we need to offer utmost satisfaction.Because of our digital connectivity and prevalent use of digital platforms, there isheightened cybersecurity risk which both consumer credit companies, banks and borrowers must be vigilant about. Cybercriminals are getting more sophisticated,hence, the need to think one step ahead, and try to manage this risk. Another emerging risk factor would be regulatory risk. Amidst the economic uncertainties, regulators can impose certain policies that may be challenging to the consumer lending business. Such examples done in the past are interest rate caps, moratorium on online platforms, andlimited digital banking license, among others.

In an era where customer experience is a key differentiator, how are you leveraging customer feedback and data analytics to enhance the credit and collections processes? Can you share any innovative approaches you've adopted?

I believe that creating a good customer journey is an iterative process where we should listen closely to what the customer prefers. And that’s how we have evolved,and will likely keep evolving our processes to suit our customers’ preference, which also evolve over the years. For instance,for our collections—weare shifting to two-way chat instead of voice calls for some of the clients as they prefer to message than talk to someone.

With the rise of alternative credit scoring models and non-traditional lending sources, how do you envision the future of credit products evolving? What implications does this have for traditional credit providers?

Assuming that these alternative credit scoring models can predict as well as traditional credit models,  this will unlock more credit products for first-time borrowers and those with limited credit experience. It will be a good financial inclusion tool that will allow lenders to lend to these types of borrowers with calculated risk rather than outrightly denying them any form of credit. We are beginning to see it now with telco scores, wallet scores, and other types of non-traditional scoring models. Depending upon the product offering of the traditional credit providers, if their products are similar to the ones using alternative scoring and they will not adapt, then either their risk appetite is low or they do not trust these new models. Implication here is that the competitors will gain market share. However, if their loan offerings are different much bigger loans, business loans, or secured loans—then these alternative models may not be applicable. It all depends on the business model and the applicability and predictability of these new models.

How important is financial literacy and consumer education in shaping the future of consumer finance? What initiatives or innovations should companies pursue to enhance financial education among their customers?

I personally feel the need to highlight that financial literacy is crucial in shaping the future of consumer finance, and that’s the reason we have invested in a curriculum that we can offer to our clients. In more developed countries, financial literacy is offered as early as pre-school, hence they develop the know-how and the right behavior towards finances.  In the Philippines, it is nowhere in the curriculum.

For SB Finance, it is our mission to give our clients the opportunity to make the right decision by providing them with the right knowledge through financial education. We are envisioning to include financial literacy in all of our processes from our online client onboarding, to our customer service and collections in other words, in the entire customer journey. I think that it is high time that a public-private partnership initiative on financial education be rolled out extensively among government agencies and private consumer finance companies and banks.