Category : Best Process Innovation
Innovation Title : Buy Now Pay Later Engine: Digital Customer Onboarding, Digital Credit Check of Customers and End to End Supply Chain for Brands.
Organization : Dana Fintech
Millions of shoppers now buy mobile handsets, home appliances and electronics on installment payment plans or ‘buy now pay later’ facility. BNPL fintech and brands are launching a BNPL facility ensuring an end to end seamless customer journey. In Bangladesh, 25 million service sector workers like the factory workers, call center workers, gig workers, E-commerce delivery platform workers are potential borrowers and do not have any credit score. So, Dana Fintech plan was to develop a BNPL engine, for brands for different sectors like E-commerce, FMCG, RMG and so on. Therefore, using this BNPL engine brands can check the credit worthiness of their customers and based on the result, they can provide desired products to them in a short period of time with the facility of paying later.
The objectives of the Innovation in the given amount of time are followed:
■ Creating credit worthiness of underserved potential borrowers who purchase consumer electronics, handsets, furniture and mobile handset on installment.
■ Improving the current process of offering products on installment to customers.
■ Enhancing capacity of brands to onboard customers digitally and underwrite BNPL applications instantly.
■ Current manual BNPL journey takes 4 days to 7 days while Dana BNPL journey offers instant approval decision and product delivery by 24 hours.
The core idea/concept of the BNPL was to create a solution for the consumers and brands to connect both end instantly and score customers based on alternative data to check credit worthiness of customers. Moreover, the purpose of the BNPL engine is also to help brands to reduce their BNPL management system and turnaround time to offer products to customers.
Dana uses different customer consented data funnels to score customers in 3 minutes. Individuals can choose a product and apply for a BNPL facility from Dana app or Dana white level app for brands. Brands get the BNPL applications on Dana digital underwriting dashboard and can underwrite and offer borrowers installment-based payment plans instantly. Customers get products delivered in 24 hours and keep paying back on the due date.
In Bangladesh, 90% of the population have no access to formal finance and only 1.7 million credit cards have been issued so far. Hence, consumers are adopting offline BNPL to buy products of different brands. Brands cannot scale BNPL sales volume to the next level without the BNPL engine. Moreover, brands have to reject BNPL applications of a good number of interested customers due to lack of income validation and credit scores. Here comes Dana BNPL Engine with an alternate digital credit scoring engine and digital underwriting platform to enable brands onboard customers digitally with eKYC and score them based on alternative data to offer BNPL facility instantly.
Result and Impact
50 mobile handsets have been offered to 50 customers using Dana BNPL engine. The impact of this innovation is that through BNPL service now service holders or any individuals are capable of buying products in installments without any credit card. Using BNPL engine, brands can now check the credit worthiness based on alternative data of their customers capability of buying products in installments and can digitally offer ‘buy now pay later’ service to the customers. This innovation is helping to minimize the hassle for both sellers and buyers so they can scale the business with more profitability and improve the ultimate end to end supply chain.