Fintech start-up accelerates loan approval process for financial inclusion

Smile API CEO Jerome Eger is committed not just to speed, but secured access to employment data.

Amidst rising costs of living and declining financial security in Asia, more people find themselves struggling to make ends meet. Because of this, a majority of the Asian population opt to make use of credits and loans. However, access to these financial tools remains a challenge. 

In addition, applying for loans in most countries across Asia is tedious work and involves a lot of manpower and processes.

Recognising the need for quick cash and the challenges posed by lengthy processing times, Singapore-based fintech start-up Smile API has introduced a platform that accelerates the employment verification process using artificial intelligence (AI).

“In many parts of Asia, excluding Singapore, you don’t have very good access to credit cards. So, many people would actually go to lending companies if they need cash,” Jerome Eger, CEO of Smile API, pointed out in an interview with Singapore Business Review.

“But the problem arises when you don’t have a credit score. Financial institutions need to know if they can trust you to repay the money. They need to confirm that you have a job to ensure repayment, and Smile helps to do that,” Eger added.

In the Philippines, for example, individuals seeking a loan must provide proof of employment and income, which is traditionally achieved by presenting a Certificate of Employment (COE) and payslips.

“If you need fast cash, you basically have to go to your employer, get a piece of paper signed, and also get it stamped, sometimes by tax authorities or by the bank. You need to produce several payslips and then you have to upload those. However, the lender does not know whether this is a real COE or whether it is faked,” Eger explained.

Another way would be to course through a call centre to verify the applicant’s employment, which Eger described as “time-consuming” and “very expensive.”

“It’s a lot of friction and Smile helps to verify employment and income within a couple of seconds for 90% of the population in the Philippines,” he said.

Secured convenience

Smile API’s technology provides convenience and transparency for both financial institutions and end users. It secures employment data that end users can choose to share with banks.

“Our customers are financial services, and once they use Smile’s service, we have a visual code snippet that we can integrate into their app. So think about your banking app; as soon as your bank becomes our customer, you will have the possibility to connect your payroll account within your banking app without having to leave the app,” Eger explained.

“And there is a consent checkmark. You have to consent to sharing your information with your bank and Smile helps you to facilitate this. So you just have to give consent to do that and then we go and work on that,” he added.

With Smile, end users have a way to connect with numerous financial platforms whilst maintaining full control over the data they share. For example, end users can decide how long a platform can hold their data. Additionally, Smile requires these platforms to delete end user data.

“Think of it as a small sub-application within your bank application that seamlessly integrates into your banking application,” he said.

At present, Smile is serving the markets in Singapore and the Philippines, with a particular focus on the Philippines where there is the greatest demand for the product.

Market relevance

Like many start-ups before and during the pandemic, Smile was initially a different service. Smile initially started with the concept of offering a service that allowed workers to access their earned wages before their scheduled payday.

However, the pandemic hit when Smile started building its service infrastructure, forcing a pivot despite having already assembled a team. Fortunately, several lending companies were interested in using the data at that time.

“We were able to partner with these companies so they can utilise the data. So we became an employment data API, a company that provides employment data to licenced financial services,” Eger said.

What started as a backup plan turned into a success story. Smile was able to prove its market relevance and consistently demonstrated confidence in securing funding, despite facing time-related challenges.

“Funding is always a challenge not because it is difficult, but because it takes time. What that means is, if the day has 24 hours, you have to take time away from your customers, even though you want to make them smile all the time, you have to spend a lot of time fundraising,” he said.

“Other than that, it has not been a challenge for us to raise funds. We’ve been successful in fundraising in the past few rounds. Our investors are, among others, a number of angel investors. Among the institutional investors are  Plug & Play, Afore  Capital, and DEG. ” Eger told Singapore Business Review.

With these funds, Smile targets markets that need financial inclusion and faces high interest rates and a lot of friction during the application process for all sorts of digital services.

Making customers smile

To light up their customers’ faces with smiles, Smile aims to become the most trusted source for employment data across Asia.

“We invest an awful lot in building trust for our platform. We are regularly conducting penetration tests for data security of our system. We are registered with the National Privacy Commission. Everybody in Smile’s management team is a certified Data Protection Officer under the Data Protection Act of the Philippines, including myself,” Eger said.

For unparalleled data security, Smile’s entire system infrastructure is safeguarded by one of the world’s top 100 chief information security officers.

“Smile is a a fully audited and certified entity under the BSP bank supplier standard (central bank of the Philippines). "In handling sensitive information about so many individuals, maintaining trust is paramount," emphasized the CEO of Smile. "We work diligently every day to ensure that we are a trusted source for employment data."

Maintaining this momentum and dedication, Eger envisions the company to completely eradicate and reduce data-related friction in all digital processes in the future.

“Think about how many people are being hired on a daily basis, and need to show their new employer what their past employment was. Think about what Singapore has achieved with SingPass, and imagine if you could have SingPass for the world,” he said.