Leading South African digital lender Wonga leverages Stitch Financial Data to dramatically reduce loan approval times and get customers access to funds faster.
Problem: Wonga customers often need access to cash quickly, and existing processes for income verification include manual uploads, longer approval times and incorrect documentation provided by customers.
Stitch solution: With Stitch Financial Data, Wonga customers can log into their financial accounts securely and authorise the Wonga team to instantly view their transaction and balance history. As a result, the team can verify income and affordability fast, without worrying about fraud.
Result: The Wonga team saw approval times drop from hours to less than ten minutes for customers that verify using Stitch, allowing them to provide access to loans much faster.
Wonga launched in South Africa in 2012 with a goal of enabling more people to access affordable short-term loans when they need it most. Today the firm offers loans to existing customers for up to R8000, repayable over up to six months, or to new customers for up to R4000 over up to three months.
Wonga was one of the first brands globally to fully automate the lending process. All Wonga loans are fulfilled entirely online today – which means customers don’t have to spend time calling or visiting a branch, or worry about filling manual forms. As a result, they can access cash much faster, particularly in times of financial emergency.
The firm also offers customers flexibility, enabling them to choose exactly how much they want to borrow, and for how many days they need the funds. “We’ll never try to upsell a product to customers,” said James Williams, Head of Marketing at Wonga. “We’d rather offer customers a loan based on what we know they can realistically afford, than push them to borrow more than they need to.”
Since its official inception in South Africa, Wonga has funded more than R10.8 billion in loans with a total loan count of 3.7 million.
Wonga x Stitch Financial Data: reducing time to funding from hours to minutes
Until recently, one piece of Wonga’s loan application process was executed manually: verifying customer income and financial behaviour. Customers needed to manually upload bank statements, payslips and other sources of income verification in order to get approved for a loan. This requires manual review, and can lead to inaccuracies, as documents can often be fraudulent. After a poor experience with a previous international digital financial data provider that often timed out and left customers stranded, the Wonga team turned to Stitch.
Today, Wonga uses Stitch Financial Data to enable fast, digital onboarding and get customers access to funds faster. Now applicants can log into their financial accounts securely and authorise the Wonga team to instantly access their transaction and balance data, allowing Wonga to verify their income and get them approved in minutes.
“With Stitch, our funding time went from hours down to less than ten minutes. Stitch is fast, provides more accurate information and removes the fraud aspect.”
“For those seeking short-term loans, fast access to cash is paramount,” Williams said. “Getting bogged down by long, manual approval processes and waiting hours to access funds can have a significant impact on customers when they’re in a moment of need. With Stitch, a customer can log in to their bank account and instantly share their financial data, mitigating the need for manual uploads and enabling us to approve them much faster.”
Stitch data enables the Wonga team to automatically pinpoint a customer’s salary and check this against what they’ve declared on their application as their income.
Expanding reach to previously underserved customers
The Wonga team sees a lot of potential to use the data accessible via Stitch for more data-driven decisions, including expanding their reach to new sets of customers that may have previously been excluded from the credit system.
Today, a significant part of South Africa’s population remains underserved by credit products due to lack of credit bureau data. According to TransUnion, as of 2020, nearly 26% of South Africa’s adult population could not access credit due to lack of a credit history. Many of these people have full time jobs and sources of income, but as they don’t have a footprint at the credit bureau, they remain underserved.
“We’ve had to be cautious about lending to those without data from the credit bureau. But with Stitch Financial Data we see potential for new ways to serve this previously financially excluded population. We’ll be able to see transactional data in their bank accounts and use this as a gauge for how they manage their money,” Williams said.
What’s next: leveraging financial data to deliver greater value to customers
The Wonga team believes access to Stitch data can help them build out additional data-driven offerings that provide even greater value for their users.
“For example, with consented data, we can look at a particular tranche of users and see where they are frequently spending. Based on this, we can send them vouchers or promotions for things we know they use on a frequent basis and have an interest in. This is something we wouldn’t have been able to see previously,” Williams said.
The team also uses behavioural data to enable customers to access a higher loan value over time, based on certain credit factors and the way they’ve historically serviced Wonga loans. They see potential to use additional alternative data sources like Stitch to gauge customer financial health and better inform this scale.
Moving forward, the team is looking at even more ways to use data for decisioning, product development and improving the user experience to make accessing a loan as seamless and easy for customers as possible.
Want to see how Stitch Financial Data can help you reduce time-to-money and improve your user onboarding process? Access test credentials and start building with Stitch now at stitch.money/get-access. Access Financial Data for free for three months when you integrate LinkPay.