Empowering the data-dependent banks

By Lee C. Chipongian

Pia Lopez Arellano is an educator, mentor, and a provider of information – the kind that would help shape this country’s financial inclusion, expand inclusive growth and propel the country to becoming an upper-middle income status in less than five years.

As head of the only private sector-led credit bureau here, with over a billion consumer records under its global data network, TransUnion is what every bank and other financial institutions need to scrutinize borrowers’ profile as it collects and shares credit data.

Professional advocacy

For Arellano, her work is an extension of what she considers her personal advocacy: Teaching, and it’s the teaching of the importance of a consumer’s most-valued asset — his or her credit risk profile and (positive) score. For some, one’s credit history is the sum of his or her good (and bad) choices in life.

“I see my role as CEO as a continuation of my education advocacy – educating customers by sharing new insights which can empower them to make better decisions,” she said. She already does this with her TransUnion team.

Arellano said she actually did teach at school. For three years – as a break of sorts from the corporate world – she taught at the Ateneo de Manila School of Management. She described this period as “the most fulfilling.”

In the last two decades and four years, Arellano — who was a cum laude economics graduate from the University of the Philippines and an ESSCA University in France (one of Europe’s top business schools) alumni — has worked as head of sales at Visa (Philippines and Guam) and as vice president for retail banking at Chinatrust Banking Corp.

Citibank, which was her first banking job, was her school of hard knocks. “Citibank was more than a work place – it was a university. The knowledge and the lessons learned I carry with me to this day.” She’s in excellent company. Most of the local CEOs in the country, particularly in the financial world, are ex-Citibankers.

Today, under her watch as president and CEO of TransUnion Philippines, it’s her job to make sure the company she leads will remain as the country’s top private credit bureau and that she’s running a full-service, risk management and information solutions provider of consumer credit report, generic bureau score, portfolio review, among others.

Source of inspiration, strength

Arellano, only in her mid-40s, became the credit bureau’s highest ranking official in 2017. She’s been preparing for this role for some time.

“My corporate experience cuts across banking, global payments, remittance and telco so it seems as if my exposure thus far has paved the way and opened doors for me to lead a company like TransUnion who plays a significant role in nation-building by empowering lenders to extend more credit, triggering a virtuous cycle of increased consumption, production and job creation, ultimately fueling the economy and resulting in prosperity across more Filipinos,” she said.

Two key words here that make Arellano’s “a day in the work” worthwhile: Nation-building and financial inclusion. It’s a source of fulfillment and at the same time, it’s frustrating work for her, and for any leaders who wants to change the world.

“Financial inclusion takes a village and concerted effort amongst all players in the ecosystem. Admittedly, I can be quite impatient at times and my wish is that we could move at a more rapid pace,” she said.

This is where Arellano – consciously or subconsciously – may channel the tower of power that was the woman who gave birth to her, her mother, Mrs. Norma Dolor Lopez.

“My mother has always been my hero. She showered me with so much unconditional love and made me appreciate the value of hard work at a very early age,” she said. “She also made me feel that with passion and perseverance, I could achieve anything and everything I set my heart and mind to. And most importantly, to never forget the values of humility, kindness and compassion.”

Mrs. Lopez has done her admirable guidance in molding Arellano into the kind of human being she will become, and is. And, the kind of person she became, never stopped looking for valuable insights, or for that sacred revelation she first learned as a child. The media mogul, Oprah Winfrey, comes to mind (“I adore her,” she said) and “The Secret” author, Rhonda Byrne, whose “to think is to create” and “ask, believe and receive” were life-changing phrases for Arellano.

With her mother’s guidance growing up, it’s not in Arellano to think ill of others. “Everyone has a back story and though it is very tempting to have an opinion and be quick to judge – I always try to press pause before doing so.”

Global company

It seems that for Arellano, it’s all turned full circle. “I was the youngest product manager at Citibank way back then, and launched Ready Credit in the market … in a way things are coming full circle. I helped launched the first unsecured credit product in the market then, and today, I am continuing the work by helping to empower greater access to credit to promote financial inclusion,” she said.

US-based TransUnion is a global company and this is leverage that the local subsidiary takes careful advantage of, particularly in terms of the latest threats, cyber-related. “We are able to quickly assimilate the information and cascade it across efficiently to ensure we are always a step ahead of the curve,” said Arellano. “We are a big data solutions company after all so it is imperative we do adopt this ethic.” As of 2015, they have 11 million consumer accounts in the Philippines.

Arellano said the name of the game is regular upgrades and getting the latest technology to enable them to provide value-added solutions to their partners and clients. It’s clear that with their products and services, they need to expand more.

“We constantly ask ourselves how our products and services can help other industries and businesses beyond just finance. Innovation is a necessity to maintain our exponential growth, and with innovation comes new challenges that we must be very conscious about in order to expand our reach,” she said.

While expansion is a must, Trans Union is aware that they have “barely scratched the surface” and that “there are more opportunities to reap in terms of expansion.”

Arellano said the Philippines – in general – does not have a mature credit profile. About 65 percent of the population have no access to banking services, or unbanked, or have no bank accounts. The millenials though – or those in their 20s and 30s – are showing up in numbers in terms of new credit accounts being opened.

“This shows that the prevalence of technology and digital services are motivating the previously unbanked to gain access to these services,” noted Arellano. “This is good news because it further drives financial inclusion in the country and is indicative of a growing middle class that has need for such services and products.”

A full-service credit bureau is crucial in this, said Arellano, in that they open up new innovative ways for how financial institutions can use information to expand market and businesses, and create unique financial customers. So, the next time your bank calls you and tells you that the loan you applied for has been approved (or disapproved), you can probably assume Arellano, and TransUnion, was behind you getting your loan approved or declined.

“A credit report is a relatively new concept to Filipino consumers,” she said. “It is important to understand what this is. It’s a record of a consumer’s credit history. A TransUnion credit report contains information provided by partners (such as banks, finance companies and credit card issuers) and includes data on a consumer’s outstanding debt and payment history. The information can be used to help lenders make informed and responsible lending decisions, while also ensuring consumers can check the information held on them is accurate,” she explained.

“We are careful custodians of the information we hold,” Arellano emphasized, citing strict compliance to the Data Privacy Act.

Still, data and information provided to banks will go as far as how the banks will choose to use them. “(We) can only help banks make informed decisions. It’s still ultimately up to the financial institution as to who they choose to extend credit to,” she said.

Arellano commends the Philippine central bank for being a pioneer in digitalization, especially in promoting financial inclusion. But, she said it shouldn’t stop there, it is not just about adopting digital banking as a convenient and cheaper way of delivering banking products and services.

“Digital literacy is also needed as use of these services become more prevalent. Being knowledgeable about protecting yourself online is the first step that consumers need to take so that they don’t fall prey to unethical online practices,” said Arellano.

Trips, foodie, and weekends

It’s these things she could look forward to outside of work: Planning and taking trips (by road or by airplanes), hunting and enjoying new food pleasures, sports or movies with one or both of her children, and date nights with the SO (significant other).

“Trips I take with my family,” said Arellano. While not considered extravagant endeavors (“We still work with a budget” – she’s quick to add), these trips “are definitely times when we try to indulge in the best food and experiences – both touristy and off the beaten track,” she said.

The weekends – not surprisingly – are “devoted to my family,” said Arellano.

“I play tennis with my son and try to visit a favorite restaurant with my foodie daughter,” she said. “If there is a good movie, we will try to catch it and then have a nice lengthy debate about the merits of the film – was it entertaining? Did it provoke thought?” And — speaking of movies — Arellano named her Top 3: “Contact (1997) – I love sci-fi/space movies and this one was more than that – it was actually about faith. Pretty Woman (1990) – it’s a modern fairy tale – what’s not to love? The Shack (2017) – it helped provide clarity to a lot of existential questions I had.”The SO has a special day. “Friday night is date night with my husband,” she said.

Herself, on the “sometimes” she’s her own company, Arellano said it only takes her Bose Bluetooth earphones to get her heart, and health, going on optimum levels: “They empower me to run longer and can help shift my mood quickly when I connect to my playlist.”

The proof of her success in life and living? At least one proof, in its simplest form is by the number of unread emails in her (work) mailbox: zero. She gets things done.