Manila, Philippines, August 19, 2026 – TransUnion (NYSE: TRU), a global information and insights company and the Philippines’ first comprehensive private credit reference agency, today released its fourth annual Credit Perception Index (CPI). The Philippines’ 2026 CPI score rose to 75 out of 100, the highest level recorded since the study was launched. The increase was mainly driven by improvements across three score factors: favorability (+4 points), product trust (+3 points) and product knowledge (+3 points).

TransUnion CPI Score and Score Factors* of the General Population

Introduced in 2023, the CPI examines how Filipinos perceive and engage with credit, including the factors that influence their attitudes, behaviors and financial decisions, with the goal of supporting broader financial inclusion in the Philippines.

Beyond the record-high CPI score, the study found that financial confidence softened amid inflation and cost-of-living concerns, even as consumers took proactive steps to strengthen their financial wellbeing. The findings also point to growing momentum for digital banks, shifting borrowing preferences toward formal financial institutions and clear factors that influence consumer trust.

“What stands out this year is that confidence in credit continued to improve even as consumers faced a more challenging economic environment,” said Peter Faulhaber, President and CEO of TransUnion Philippines. “With household budgets remaining under pressure, we might have expected consumers to become more hesitant. Instead, we're seeing greater trust, familiarity and willingness to engage with formal financial products. That signals a maturing credit market and creates new opportunities to expand access responsibly.”

This growing engagement was reflected in continued increases in financial product adoption. eWallets remained the most widely held product at 80%, up four percentage points [pp] from 2025, while buy now, pay later (BNPL) services recorded the strongest growth in adoption (+8 pp), reaching 26%. Credit card ownership also increased to 38% (+7 pp), with personal loan adoption reaching 26% (+1 pp).

Financial Products Owned by Filipions

Financial Confidence Softens, but Consumers Remain Proactive

While attitudes toward credit improved, Filipinos remained cautious about their broader financial outlook. Expectations of financial improvement fell to their lowest levels since 2023, with 64% of consumers expecting their financial situation to improve over the next three months and 73% over the next year, both down three percentage points from 2025. Inflation, rising living costs and energy prices remained the leading concerns affecting future financial wellbeing.

Future Financial Outlook in the Next 3 and 12 Months

In response to these pressures, Filipinos continued to take proactive steps to strengthen their financial wellbeing. Saving remained the most common planned action (86%, +2 pp), while more consumers also intended to access educational materials (73%, +5 pp), explore new digital products and financial technology (FinTech) services (70%, +6 pp), and use a broader range of financial products and solutions (66%, +6 pp). More than two in five (43%, +5 pp) also said they intended to borrow or use credit for purchases in the near future, continuing an upward trend observed since 2023.

“The survey reveals a shift toward more intentional financial decision-making among Filipinos,” Faulhaber noted. “While consumers are more cautious about their financial outlook, they are continuing to save, seek financial education and explore new financial products. These behaviors demonstrate how consumers are proactively adapting to ongoing cost pressures.”

Digital Banks Gain Momentum and Borrowing Preferences Continue to Shift

Credit continues to play an important role in helping Filipinos address everyday financial needs. Emergency expenses (59%), personal expenses (50%) and family expenses (45%) emerged as the most common reasons consumers used credit products and services.

At the same time, borrowing preferences continued to shift toward formal financial institutions. Future borrowing intent increased most for digital banks (+11 pp), followed by traditional banks (+8 pp) and credit cards (+6 pp), while intent to borrow from family and friends declined by 11 percentage points to 45%, reaching its lowest level since 2023.

Borrowing intent

The growing preference for digital banks appears to be supported by rising consumer familiarity and confidence. More than half of Filipinos (52%) reported using a digital bank. Digital banks also recorded the strongest gains in consumer perceptions, with knowledge increasing 15 percentage points to 80% and favorability rising 14 points to 79%, surpassing traditional banks on both measures (at 78% and 76%, respectively). Perceived safety of digital banks also climbed 11 points to 84%, second only to traditional banks at 88%.

Education is Key to Further Credit Adoption

Looking ahead, sustaining positive credit perceptions and supporting further adoption in the Philippines will require continued effort to build consumer knowledge and trust. Amid ongoing public and private initiatives to promote financial education, Filipinos reported that access to clear information still remains a challenge. One in four Filipinos (25%) reported difficulty finding materials related to credit and financial products. Among them, uncertainty about which sources to trust (60%) and information that was too complex or confusing (44%) were the most commonly cited barriers.

The study also revealed the factors most likely to strengthen trust in financial products and services. Transparency (56%), fair or low interest rates (53%), and strong security and fraud protection (52%) emerged as the leading trust drivers among Filipino consumers.

“Our Credit Perception Index underscores an important reality: consumers are increasingly seeking access to formal and digital financial services, but broader financial inclusion requires a coordinated effort to provide clear product information, strengthen financial education and safeguard consumer protection,” said Faulhaber.

“At its core, financial inclusion begins with information inclusion. Through responsible data sharing, we can help more consumers access the formal financial system and enable lenders to make better-informed decisions, paving the way for a more inclusive and financially resilient Philippines.”

In the Philippines, TransUnion advances financial inclusion through collaborations with financial institutions, regulators and wider industry stakeholders. The company helps lenders assess consumers with limited credit histories using alternative data and promotes industry-wide fraud prevention exchange through the Fraud Industry Council, launched in 2024. It also partners with the Bangko Sentral ng Pilipinas (BSP) and the industry to advance credit education and financial literacy.

TransUnion’s Credit Perception Index (CPI) is an annual study conducted exclusively in the Philippines that tracks how Filipinos perceive and engage with credit, the drivers and barriers influencing their behavior, and the implications for the broader financial ecosystem. The 2026 study surveyed 1,000 consumers from May 6-26, 2026, to assess Filipinos’ current attitudes and future openness to credit, examining their knowledge, trust and favorability toward credit and other financial products.

For more information and insights, please view the full report of the TransUnion Credit Perception Index.

*The CPI Score Factors

1. Reservations – Concerns or barriers that may discourage credit use.
2. Stigmas – Negative perceptions associated with credit.
3. Credit messaging – The likelihood to use credit after learning about its potential benefits.
4. Favorability – Overall positive perceptions of credit products.
5. Product trust – The perceived trustworthiness of credit products.
6. Concept knowledge – Self-reported knowledge of a defined concept of credit.
7. Product knowledge – Self-reported knowledge of specific credit products.

Higher scores are more favorable across all factors. Stigmas and Reservations are reverse-scored, meaning higher scores indicate fewer negative perceptions and reservations toward credit.

Avishek has more than 17 years of experience in global banking, combining strong international exposure across Hong Kong, India and the United Kingdom with extensive cross‑regional collaboration spanning Asia Pacific, Europe, the Middle East and Africa (EMEA), and the Americas. Prior to this role, he served as Senior Vice President at HSBC, where he led the unsecured lending business across nine Asian markets. Avishek holds a master’s degree in statistics from the Indian Statistical Institute in Kolkata.

He brings deep expertise in advanced analytics and data science leadership, with a proven track record of applying emerging data technologies to shape product strategy and deliver measurable outcomes. This background in data innovation aligns closely with TransUnion’s evolution from a traditional credit reference agency to a trusted information and insights partner, enabling organizations to view consumer identity holistically through diverse data assets and helping them to make informed decisions with confidence, which forms the foundation of trust in the modern economy.

This appointment marks a significant milestone for TransUnion Asia Pacific, as it brings together regional analytics capabilities – including Data Science and Analytics (DSA), Data Asset Management (DAM) and Data Strategy (DS) – into a more integrated structure under one regional leadership model. Together, these efforts will continue to accelerate TransUnion’s analytics value creation and reinforce its commitment to the responsible and secure use of data.

“As the role of information and data continues to grow in enabling robust and evidence‑based financial decisions in today’s economy – particularly amid persistent global uncertainties, rising fraud risks and increasing regional integration – the capabilities to manage, analyze and translate data into trusted and meaningful insights has never been more important,” said Marie Claire Lim Moore, Asia-Pacific Regional President and Hong Kong CEO at TransUnion. “Data and analytics are central to TransUnion’s continued evolution into a trusted information and insights partner powered by identity-based intelligence. We are pleased to welcome Avishek, whose deep expertise in data-driven transformation and strategic analytics will further strengthen our ability to deliver value beyond credit, supporting businesses and consumers in making more confident, informed decisions and advancing our mission of Information for Good.”

Commenting on his appointment, Avishek said: “It is an honour to join TransUnion at a time when trusted data and insights are increasingly vital in helping financial institutions, businesses and consumers navigate a rapidly evolving environment. TransUnion has built a strong platform that harnesses data responsibly to drive transparency and resilience. The integration of our regional data strategy – encompassing effective sourcing, disciplined standardization, advanced analytics and rigorous quality management – underpins a robust, secure and well-governed data ecosystem. I look forward to building on this foundation to deliver meaningful impact for business, individuals and the broader economy.”

Peter Faulhaber, President and CEO at TransUnion Philippines and Jason Crasto, Country Manager for Mastercard in the Philippines

Manila, Philippines, March 10, 2026 – Following a successful pilot program, TransUnion Philippines, an information and insights company, and Mastercard (NYSE: MA), a global technology company in the payments industry, are working together to give financial institutions a broader and more timely view of consumers’ financial behavior.

By combining TransUnion’s comprehensive credit, identity and alternative data insights with Mastercard’s aggregated transaction intelligence, the collaboration supports stronger decision‑making, more meaningful customer engagement for lenders, and sustainable growth across the Philippines’ lending ecosystem.

TransUnion, the Philippines’ first private comprehensive credit reference agency, helps institutions better understand consumers’ likelihood and ability to maintain credit commitments – even those who may not have held a credit product before. Mastercard’s behavioral signals, which are based on aggregated indicators of spending activity, further complement and supplement these insights, enhancing lenders’ understanding of consumers’ financial capacity and risk.

For lenders, the collaboration will strengthen how institutions identify and engage credit‑ready consumers. New‑to‑Credit (with no credit history) and thin‑file (with minimal credit history) consumers can be difficult to assess using traditional information alone, as there may be insufficient data to support confident decisioning. The enriched insights generated will allow lenders to reduce friction in the application review process, and better tailor and align product offerings with consumers’ demonstrated financial patterns.

The combined view helps financial institutions distinguish between applicants with similar profiles, understand emerging opportunities within existing portfolios, and engage customers appropriately based on wider financial activity.

For consumers, the outcome is a decision process that is more accurate, timely and reflective of their financial behavior, resulting in credit experiences that feel more personalized, accessible and suited to their personal circumstances. Ultimately, this will contribute to greater financial inclusion, enabling Filipinos to access more economic opportunities.

In addition to the expanded data coverage, Mastercard — through its consulting services — has collaborated with TransUnion to enhance data propositions for financial institutions, portfolio margin optimization and strengthened collections strategies.

“This collaboration builds on TransUnion’s existing strengths in alternative data and analytics,” said Peter Faulhaber, President and CEO at TransUnion Philippines. “By enriching our existing insights with Mastercard’s behavioral data, we’re helping institutions make more confident decisions while ensuring more Filipinos, especially those with limited credit histories, can be offered fair and relevant access to the financial system.”

“Mastercard is committed to strengthening the foundations of a more inclusive financial ecosystem,” said Jason Crasto, Country Manager for Mastercard in the Philippines. “Our collaboration with TransUnion brings together complementary data assets that help financial institutions see a fuller picture of everyday economic participation. This combined intelligence enables lenders to design responsibly, grow sustainably and extend credit opportunities to people who have historically been underserved.”

At the center are Peter Faulhaber, President and CEO at TransUnion Philippines, and Jason Crasto, Country Manager for Mastercard in the Philippines. With them (from left) are TransUnion leaders Nolan Empalmado, Business Head, Financial Services; Rowena Cristobal, Director, Product Management; Amrita Bhattacharya, Chief Operating Officer, Asia-Pacific; and  Yogesh Daware, Chief Commercial Officer, together with Mastercard executives Tamish Dhamani, Director, Credit Risk Business Development, Asia-Pacific; Arlene Magtira, Vice President, Account Management, Philippines; and Pradeep Mathew, Director, Product Management Asia-Pacific

Manila, Philippines, December 11, 2025 – Filipino households are closing 2025 on firm financial footings, navigating a still-shifting economic environment with a blend of optimism and restraint. The Q4 2025 Consumer Pulse Study by TransUnion (NYSE: TRU), shows that while consumers continue to feel the pressure of daily expenses, they are adapting with a more deliberate approach to both spending and credit use.

Income stability remains a defining theme this quarter. Over two in five consumers (42%) reported an income increase in the past three months, while 41% saw no change, suggesting that while momentum has eased, households are not slipping backward. More importantly, consumers are looking ahead with confidence.

Three in four Filipinos (75%) expect their income to rise over the next 12 months and eight in ten (80%) are optimistic about their household finances for the year ahead. Together, these trends reflect a picture of resilience and steady control. Filipinos are learning to operate within tighter margins, managing pressures without losing confidence in their financial trajectory.

Cautious spending reflects a balanced mindset

Even with improving sentiment, caution remains the dominant feature of household spending. Inflation for everyday goods continues to be the top concern (81%), followed by job stability (57%) and interest rates (45%) — the same priorities Filipinos have held since 2024. This consistency suggests that consumers are budgeting with long-term challenges in mind, not short-term shocks.

Spending behavior also reflects this balance between confidence and caution. Nearly half (47%) of households have scaled back discretionary activities such as dining out and travel. One in four (25%) cut back on digital services, while another quarter (25%) dropped subscriptions or memberships altogether. Half of Filipinos (50%) also expect to spend less on holiday shopping compared to last year, showing more deliberate spending even during traditionally high-consumption periods.

Looking ahead, consumers expect further shifts in their cost structure: 47% foresee rising bills and loan payments next quarter, 42% expect medical costs to increase, and 36% anticipate higher retail spending. Yet, only a minority (27%) plan to increase spending on large purchases like appliances or vehicles. In essence, instead of pulling back from economic activity, Filipinos are redefining what “smart spending” looks like in a high-cost environment.

“The trend mirrors the wider economy — still expanding, but at a calmer pace after two years of rebound,” said Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion. “Consumers are managing spending more pragmatically, especially with Filipinos looking to spend less this holiday season compared to last year. It’s a sign of practical optimism. People are still participating in the economy but are doing so on their own terms and with greater financial intent.”

Credit access remains stable as borrowing becomes more intentional

As households stabilize their finances, their attitudes toward credit are evolving. While close to three in every five Filipinos (58%) say access to credit is very important for achieving their financial goals, this marks a slight dip from the same time last year, hinting that consumers are depending less on borrowing for immediate needs and more for deliberate, planned financial actions.

Confidence in credit access remained steady with 42% saying they have sufficient availability. Gen X (47%) and Millennials (46%) remain the most confident. However, the more significant shift lies in how people choose to borrow. Intent to apply for or refinance credit fell to 47% from 53% last year, and most planned borrowing now leans toward smaller, more flexible products such as personal loans (49%) and buy now, pay later (BNPL) (35%) arrangements.

Even abandoned applications reduced, dropping to 56% from 64% last year, though high borrowing costs (31%), possible rejection due to income or employment status (28%), and lengthy processing times (24%) still create friction. Overall, the data paints a maturing market: credit remains available, but Filipinos are making decisions with more scrutiny and financial self-awareness than before.

“We’re seeing a real shift in how Filipinos view credit. It’s moving from being a necessity to becoming a choice,” added Sun. “Credit remains available, but consumers are weighing their options more carefully, guided by how secure they feel about their jobs and savings. It’s a more thoughtful use of credit as a tool, not a crutch. As this mindset continues to evolve, it’s equally important for consumers to stay informed by regularly monitoring their credit health.”

Empowering Filipinos with accessible credit education

Recently, TransUnion announced its partnership with the Bangko Sentral ng Pilipinas (BSP) to introduce an interactive credit education module on the BSP E-Learning Academy (BELA) to help consumers understand and manage their credit scores. These resources will provide practical guidance on building and maintaining healthy credit profiles, equipping Filipinos with the knowledge to make informed financial decisions. The modules are set to be available starting next year.

This milestone marks the first collaboration between BSP and a credit reference agency on financial education initiatives through BELA in the Philippines, underscoring a shared commitment to financial literacy and inclusion. By delivering accessible, engaging content, the initiative aims to strengthen financial resilience and unlock better opportunities for millions of Filipinos.

“As more Filipinos take a more intentional approach to their finances, ensuring they have the right guidance and support will be key to helping them build long-term financial resilience,” said Sun.

TransUnion’s Consumer Pulse Study surveyed 961 adults from September 25 to October 15, 2025. This quarterly survey examines shifting consumer attitudes and behaviors based on the dynamics of income, debt, and identity theft. Respondents ranged from Gen Z, 18-28 years old; Millennials, 29-44 years old; Gen X, 45-60 years old; and Baby Boomers, age 61 and above. By capturing insights across generations and financial situations, the study helps promote greater financial inclusion by informing policies, products, and education efforts that meet the evolving needs of all consumers.

For more information, please view the full report of the TransUnion Q4 2025 Consumer Pulse Study.

Key signatories gathered at the Bangko Sentral ng Pilipinas’ (BSP) 2025 Financial Education Stakeholders’ Congress for the signing of the Memorandum of Agreement (MOA) between the BSP and TransUnion Philippines. 
(L-R) Natassia Fortea, Legal Counsel, TransUnion Philippines; Peter Faulhaber, President and CEO, TransUnion Philippines; Deputy Governor Bernadette Romulo-Puyat, Regional Operations and Advocacy Sector, BSP; and Managing Director Charina De Vera-Yap, Financial Inclusion and Consumer Empowerment Sub-sector, BSP 

Manila, Philippines, November 25, 2025 – Global information and insights company TransUnion (NYSE: TRU), the Philippines’ first comprehensive private credit reference agency, announced the signing of a Memorandum of Agreement (MOA) with the Bangko Sentral ng Pilipinas (BSP) to develop and implement a national-level credit education module on the BSP E-Learning Academy (BELA). Set to be available to all Filipinos as early as next year, the module marks TransUnion as the first credit reference agency in the country to collaborate with the BSP on financial education initiatives through BELA to promote financial literacy.

The formal MOA signing ceremony was held as part of the BSP’s 2025 Financial Education Stakeholders’ Congress on November 18, 2025. The interactive e-learning module, "Understanding and Managing Your Credit Score", will be housed on BELA – an online learning management system designed to educate Filipinos on financial literacy in the digital age. The course is interactive, featuring engaging slides, scenario-based exercises and video materials to empower Filipinos of all ages with the necessary knowledge to responsibly navigate the credit ecosystem.

A New Resource for Financial Empowerment

This collaboration represents a significant milestone in TransUnion's ongoing commitment to advancing financial literacy and financial inclusion in the country. It directly responds to the strong consumer demand for financial education, as data from TransUnion’s 2025 Credit Perception Index (CPI) showed that 68% of Filipinos aim to access more educational materials to improve their finances. With additional CPI data pointing to social media as a preferred channel for three in every five Filipinos (60%), complementary e-learning materials will also be shared on TransUnion’s own social media platforms to engage with broader Filipinos through multiple touchpoints.  

“TransUnion believes that access to credit begins with access to credit knowledge. This partnership with the BSP is a monumental step forward in our shared mission to champion financial literacy and financial inclusion across the nation,” said Peter Faulhaber, President and CEO, TransUnion Philippines. “By introducing this interactive e-learning module on the BELA platform, we are empowering Filipinos with insights needed to build and maintain a healthy credit profile — unlocking better financial opportunities and establishing a strong foundation for a more financially resilient population, in line with the Philippines’ national goal of achieving upper-middle-income status.”

During the event, TransUnion Philippines was also recognized as a “Promising Financial Education Partner” for its ongoing contributions in advancing financial inclusion through education and collaboration.

The "Understanding and Managing Your Credit Score" course will be available to all Filipinos via BELA online and through the BSP Mobile App. Download today from the App Store or Google Play Store.

Manila, Philippines, October 16, 2025 – Despite 80 million Filipinos¹ using digital wallets in 2025 and 65%² having access to formal financial services, only one in 20 consumers held a credit card, according to TransUnion data. This highlights that while financial inclusion has advanced rapidly with the expansion of digital wallets, many Filipinos might still be credit invisible without access to traditional credit products, including credit cards. Being credit invisible makes it difficult for consumers to successfully build and leverage credit to start businesses, buy vehicles, invest in property – or even to access the liquidity they need for emergencies. 

In 2023, 88% of new-to-card borrowers started their credit journey with a credit card as their first credit product, according to TransUnion data, implying that cards are a gateway for credit inclusion. As commerce in the Philippines becomes more digital, along with greater e-commerce adoption, credit cards are likely to become the preferred method of payment, especially for larger-ticket purchases.

To help lenders better understand the country’s credit-invisible consumers and promote inclusive, sustainable growth in the Philippine credit market, TransUnion (NYSE: TRU) — a global information and insights company and the country’s first comprehensive private credit reference agency — shared findings from a study on new-to-card consumers at its inaugural Philippines Financial Services Summit in Manila.

With new-to-card consumers defined as those with no prior credit card in wallet who opened their first-ever credit card, the study assessed Filipino consumers coming into the market over 12 months in 2023, and reviewed their early credit journey in terms of product uptake, repayment behavior and overall performance six months after they received their first card.

“The study emphasizes that credit cards are more than payment tools, they represent the first step towards financial mobility, offering consumers access to additional liquidity and flexibility when needed” said Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion. “Beyond enabling greater financial inclusion, they also provide an opportunity for lenders to build loyalty and trust through long-term relationships with new-to-card consumers, yielding stronger returns as their confidence and credit needs grow.”

Strong Engagement from New-to-Card Consumers but Performance Remains a Concern

TransUnion’s study found in 2024, approximately 1.46 million Filipinos became new-to-card consumers, making up around 50% of overall new card originations in that year. Among those entering the card market, around 57% were younger than 35 years of age, reflecting the strong role of digitally-engaged and connected youth in driving adoption. The demographic dividend associated with these consumers also highlights the need for lenders to capture them early to build deeper relationships over time. In terms of gender distribution, 56% of these consumers were women, which is slightly higher than the overall adult population distribution – an important indicator of credit inclusion progress.

Typically, new-to-card borrowers start with lower credit limits than established cardholders. Even when compared by borrower risk levels, they receive lower access to credit due to their limited credit history. Despite the lower limits, new-to-card consumers used their credit similarly to established cardholders and in a responsible manner, with utilization rates of 28.8% and 27.9%, respectively, after 12 months. This healthy comparison indicates that new-to-card borrowers are not eager to overuse their credit lines, which can lead to overburdened financial situations.

Table 1: Credit Card Limits Assigned to New-to-Card and Established Borrowers

Source: TransUnion Philippines Consumer Credit Database

However, payment performance gaps emerged as a concern. New-to-card consumers showed weaker credit performance compared to their better-established peers, even when controlled for risk scores. After 12 months, 28.2% of the near prime new-to-card borrowers were 30 days past due (DPD) compared to an industry average of 13.5% – 15.3%, while 4.1% of prime plus borrowers showed a 30+ DPD delinquency rate, compared to an industry average of 3.2% –4.0%, measured for same vintage time periods.

“New-to-card consumers present a strong opportunity for lenders, as they tend to be younger and demonstrate a clear willingness to use credit,” said Sun. “However, given their higher likelihood of early-stage delinquencies, lenders should invest in proactive engagement and education initiatives to help consumers build responsible credit management habits early in their credit journey, ultimately fostering long-term financial health that benefits not only the consumers but also strengthens the overall credit ecosystem.”

New-to-Card Consumers Likely to Open Additional Products to Meet Growing Needs

Once they have had a positive experience with their first credit card product, new-to-card consumers are likely to expand their credit wallet to access further liquidity.

Nearly one in ten (9.5%) of new-to-card borrowers in the study opened subsequent credit products in their first six months post their first card origination, compared to 15.7% of established credit card consumers who opened an additional product after opening a new card in the first six months of the study. This indicates a meaningful level of early engagement from these new entrants.

Among the new-to-card consumers who opted for a subsequent product, two thirds (67%) opened a second credit card as their next product, 27% chose a personal loan, 5% opened an auto loan, and 1% opened a mortgage. This indicates that new-to-card borrowers quickly learn how to use credit lines to meet their needs, and may find it easier to open similar credit facility as subsequent products in their credit journeys.

New-to-card consumers are somewhat loyal to the lenders that grant their first credit card product: 44% of them opened their second credit card from the same lender. Loyalty is even stronger when applying for a personal loan as a second product – 58% returned to an existing lender in wallet. However, loyalty declines with secured loans: only 29% chose the same lender for an auto loan, and 32% for a mortgage, which is likely due to differences in secured and unsecured lending processes and product positioning, as secured product lenders typically seek borrowers with more established credit histories and strong demonstrated credit performance.

“A positive first experience with credit positions Filipinos well to consider additional products that respond to their growing needs,” Sun said. “However, there seems to be an opportunity to build loyalty with existing lenders when they consider subsequent products, highlighting that lenders could benefit from building lifelong relationships through closer monitoring of shifting and growing consumer needs, offering customized solutions and enabling focused education initiatives.”

Credit Card Growth with Guardrails

New-to-card consumers gained lower credit lines on their subsequent credit cards than their risk and age likewise credit-established peers: 71% were granted lines below PHP50,000, and only 3% received lines in excess of PHP300,000, compared to 31% and 12%, respectively, for established cardholders.

Although new users had lower balances, their balances grew steadily over the six months following the new card opening at a rate similar to established users. On an average, established users had PHP55,497 in card balances after six months, while new users had PHP25,280. Given lower line access and potentially greater needs, new users used a slightly higher percentage of their credit limits — 37% compared to 32% for established users.

Similar to the performance of their first credit card product, new users were more likely to fall behind on payments on subsequent credit products opened. Among near prime borrowers, 6.2% of new users were 60 days past due on new products, compared to 1.6% of established users. For prime plus borrowers, 3.1% of new users were delinquent, versus just 0.3% of established users. The performance observations in subsequent products underscore the critical need for enhanced monitoring and predictive risk management approaches by lenders, along with greater efforts to educate consumers on responsible credit use.

“New-to-card consumers are not just entering the credit market — they are shaping its future,” concluded Sun. “By recognizing their potential and supporting them with the right tools, education and responsible lending practices, we can unlock long-term value for both consumers and lenders, while driving inclusive and sustainable growth across the Philippine credit ecosystem.”

*The analysis focused on those who had opened their first credit card between January and December 2023. They were compared against established cardholders with at least one active card and two years of credit history, with controls for risk score and age to ensure like for like comparisons. Subsequent originations were studied between January and June 2024. Performance on subsequent originations were studied between July and December 2024.

¹ https://thefintechtimes.com/bridging-the-banking-divide-the-rise-of-e-wallets-in-the-philippines/

² According to data from the Bangko Sentral ng Pilipinas (BSP), as cited in media report: https://www.bworldonline.com/banking-finance/2025/07/18/685852/bsp-to-step-up-financial-inclusion-efforts/;

³ TransUnion CreditVision^® risk score: Subprime = JJ to II; Near prime = HH to DD; Prime = CC; Prime plus = BB; Super prime = AA

Manila, Philippines, August 19, 2025 – TransUnion (NYSE: TRU), a global information and insights company and the Philippines’ first comprehensive private credit reference agency, today released its third annual Credit Perception Index (CPI). As an important part of TransUnion’s ongoing commitment to promote credit literacy and financial inclusion in the country, the CPI examines how Filipinos perceive credit, the drivers and barriers influencing their behavior, and the implications for the broader financial ecosystem.

The Philippines’ 2025 CPI score stands at 73 out of 100, only slightly lower from 74 in 2024¹, signifying overall stability in credit sentiment. While most CPI score factors such as favorability, concept knowledge, product knowledge, reservations and stigmas remained relatively steady, trust in credit products increased significantly by six points.

Conversely, credit messaging receptivity—the likelihood to use credit after learning about its potential benefits—dropped by nine points. This decline may be attributed to external factors such as higher interest rates and growing concerns about digital fraud.

TransUnion CPI Score and Score Factors of the General Population

Knowledge and interest remain strong

The overall stability of the CPI score is underpinned by a well-established understanding of credit and a growing appetite to engage with financial products. More than two-thirds (69%) of Filipinos say they are knowledgeable about what credit is, in general. Moreover, interest in learning about specific credit products grew, especially for payday loans (+7 percentage points [pp]), micro loans (+7pp), mobile loans (+6pp), personal loans (+5pp), and buy now, pay later (BNPL) (+5pp).

“We are glad to see the CPI score holding largely steady in 2025, supported by growing trust in credit products. More encouragingly, this year’s CPI results also tell us that Filipinos are eager to learn more about financial options that are relevant, accessible, and suited to their needs,” said Peter Faulhaber, President and CEO of TransUnion Philippines. “This increasing openness is a positive indicator of progress. As financial literacy deepens, we anticipate even greater familiarity, trust and responsible use of credit – key pillars in building a more inclusive and robust financial ecosystem in the Philippines.”

Barriers to credit use linger

Despite positive gains in trust and openness, external factors continue to hold back Filipinos from actively using credit. Across all three population groups surveyed—the general population, the unbanked and the financial technology (FinTech) users—high interest rates emerged as the top deterrent to credit usage, cited by 59%, 52% and 61%, respectively. Concerns about scams and fraud followed closely, affecting 52% of the general population, 47% of the unbanked and 52% of FinTech users. These figures highlight widespread apprehension about security threats across different population groups, regardless of their CPI score.  

Indeed, security and trust emerged as key consumer considerations when choosing to engage with financial institutions, cited by more than half (58%) of the respondents, just slightly behind convenience at 60%.

These findings underscore a critical challenge: while trust is improving, consumers still require stronger assurances through safer and more supportive credit environments. Addressing these concerns will be key to unlocking broader participation in the credit ecosystem and advancing financial inclusion across all segments of the population.

Narrowing gap between general population and the unbanked

A closer look at population segments reveals that the TransUnion CPI score for the unbanked Filipinos rose by two points—from 65 in 2024 to 67 in 2025—reducing the gap with the general population from nine to six points. Notably, this two-point increase among the unbanked also outpaced that of the general population (+2 points vs. -1 point). This improvement was primarily driven by significant gains in credit product trust (+9 points) and knowledge (+8 points).

TransUnion CPI Scores of the Three Population Groups

The unbanked also demonstrated enhanced understanding across nearly all credit products surveyed, with marked progress in knowledge of mobile loans (+16pp), payday loans (+15pp), automotive loans (+13pp), micro loans (+12pp), personal loans (+10pp) and BNPL (+10pp). These trends suggest growing familiarity with formal credit options, although overall knowledge (56%) still trails behind the general population (69%).

FinTech emerges as the first financial product among younger generations

Recognizing the increasing influence and widespread adoption of FinTech in the country, TransUnion introduced FinTech users as a new population group in this year’s CPI. Among the respondents, FinTech usage is nearly universal, with 91% reporting they use at least one digital financial product.

Most commonly used FinTech products include eWallets (77%), online banks (51%), and digital payment apps (47%). Notably, over one-third (35%) of the general population reported an eWallet as their first financial product, surpassing bank accounts (30%). This trend is especially evident among younger generations, with Gen Z (47%) and Millennials (37%) more likely to start their financial journey with an eWallet, while Gen X and Baby Boomers favored bank accounts at 40% and 34%, respectively.

In terms of credit perceptions, among the three population groups surveyed (general, FinTech, unbanked), FinTech users posted the highest CPI score in 2025 at 74, along with the highest level of general credit knowledge (71%), outperforming both the general population and the unbanked.

“The strong performance of FinTech users and the narrowing gap between the unbanked and general population reflect encouraging momentum toward greater financial inclusion,” said Faulhaber. “However, to fully unlock the benefits of credit and drive broader adoption, we must continue addressing persistent barriers – especially concerns around fraud and security that still deter many Filipinos from engaging with credit. By fostering trust and enhancing financial education, we can empower more Filipinos to participate confidently in the credit economy, helping build a financially resilient population that supports the nation’s journey toward upper-middle income status.”

For more information and insights, please view the full report of the TransUnion Credit Perception Index study.

¹ The 2025 CPI score computation was refined to provide a more holistic and robust view of Filipino consumers and capture shifting perceptions and behaviors. The same formula was applied retroactively to enable year-over-year comparisons.

With 20 years of experience in the banking industry spanning both conventional and digital institutions, Devon brings a strong track record of integrating traditional banking with innovative solutions to enhance user experiences through customer-centric strategies. He joins TransUnion from ZA Bank, Hong Kong’s first digital bank, where he was a founding member and most recently served as the Alternate Chief Executive and General Manager of Business Banking and Lending. Prior to that, he also served in leadership roles at Standard Chartered Bank and DBS Bank. Devon holds a bachelor’s degree in International Business from the Business School of the Chinese University of Hong Kong (CUHK).

With a strong focus on innovation and customer empowerment, Devon’s expertise in digital transformation aligns seamlessly with TransUnion’s commitment to delivering cutting-edge, insight-driven products and solutions that expand financial opportunities for customers and consumers in a secure and trusted environment. Under his leadership, TransUnion will further advance its product proposition and analytics capabilities in Asia Pacific, reinforcing its role in promoting financial inclusion through data and insights across the region.

“We are pleased to welcome Devon at a pivotal time for Asia Pacific, marked by the post-Credit Data Smart (CDS) era in Hong Kong and a fast-growing economy in the Philippines,” said Marie Claire Lim Moore, Asia-Pacific Regional President and Hong Kong CEO at TransUnion. “As market dynamics shift, it is essential for TransUnion to scale our product, data and analytics capabilities by leveraging global expertise and advanced technologies to better serve customers and consumer. Devon’s unique perspective as a former customer and partner gives him an unparalleled understanding of how our solutions can effectively address evolving market needs. We are confident his leadership will be a strategic accelerator for our growth and further our mission of delivering Information for Good.”

Commenting on his appointment, Devon said: “It is a true honor to join TransUnion, a global leader with a strong focus on innovation, data integrity and empowering smarter decisions through actionable insights. This is an exciting time, as Asia Pacific undergoes rapid digitalization and evolving consumer expectations. The demand for trusted, forward-looking credit and fraud solutions has never been more crucial. Having witnessed the meaningful impact of TransUnion’s proprietary data and technology in supporting financial inclusion and resilience, I am excited to expedite innovation to deliver even greater value to consumers and businesses. Together, we will strengthen the region’s financial ecosystem, foster deeper trust and unlock more secure, inclusive opportunities that benefit individuals, institutions and the broader economy.”

Manila, Philippines, May 16, 2024 – Based on recently released proprietary insights from TransUnion’s (NYSE: TRU) global intelligence network, the company found that 8.3% of all digital transactions where the consumer was in the Philippines were suspected to be Digital Fraud in 2023. This number is 66% higher than the global suspected Digital Fraud rate of 5% over the same period as reported in the TransUnion 2024 State of Omnichannel Fraud Report.

The report further revealed that the volume of suspected Digital Fraud globally grew faster than the actual number of digital transactions worldwide. The volume of suspected Digital Fraud globally increased 14% year-over-year (YoY) in 2023 and 105% from 2019 to 2023, outpacing the 6% growth in digital transactions between 2022 and 2023, and 90% from 2019 to 2023.

Account login presents highest risk in consumer journey

Findings from the report also indicated a possible shift in tactics employed by fraudsters attempting to engage with potential victims at an earlier stage in their consumer journey. For digital transactions where the consumer was in the Philippines, 13.3% of transactions associated with account logins were suspected to be Digital Fraud in 2023.

The second highest percentage of suspected Digital Fraud in the customer journey was account creation with 3.2% of those transactions suspected to be Digital Fraud. The occurrence of suspected Digital Fraud at the initial stages of account login and creation is significantly higher compared to the final financial transaction stage which had a rate of 1.2%. This stage usually involves activities such as purchases, withdrawals and deposits, which typically take place towards the end of a customer’s journey.

“This rise in suspected Digital Fraud in the account login and creation stages of the consumer journey may represent a paradigm shift of sorts among fraudsters,” said Yogesh Daware, chief commercial officer at TransUnion Philippines. “Alongside traditional tactics to gain access to and ultimately compromise existing accounts, fraudsters are also increasingly choosing to create new accounts that they can control themselves. As data breaches continue to pose a threat to sensitive or confidential information across various industries in the Philippines¹, fraudsters could possibly leverage synthetic identities assembled in large part using credentials gathered from such incidents.”

Retail identified as the industry most targeted by suspected Digital Fraud in the Philippines

The report further revealed that for transactions where the consumer or fraudster was located in the Philippines, the industry that saw the highest suspected Digital Fraud rate was retail at 11.8% in 2023 despite being down 18% from 2022. This was followed by financial services at 10% and communities (online dating, forums, etc.) at 5.2%.

Financial services tallied the greatest increase in the suspected Digital Fraud rate, up 41% in 2023 from 7.1% in 2022. While the total number of financial services digital transactions when the consumer was in the Philippines was 51% higher in 2023 compared to the previous year, the volume of suspected Digital Fraud in this industry significantly outpaced this growth, with a surge of 113% from 2022 to 2023.

Retail saw the highest suspected Digital Fraud rate in 2023 in the Philippines,

while financial services saw the highest growth rate

Source: TransUnion TruValidate™

“While the global retail industry has consistently been among those with the highest suspected Digital Fraud attempt rates in recent years, we saw it placed at the top of the list both locally and globally in 2023. More concerning is the situation in the Philippines, where the suspected Digital Fraud rate across various industries exceeds global averages, except for telecommunications,” said Daware. “As a result of credentials stolen in data breaches, it has become increasingly easy for fraudsters to perpetuate attacks that leave consumers vulnerable to account takeover at an earlier stage in the customer journey. In response to this, it is crucial for organizations across industries to take proactive measures to enhance their protection throughout the entire customer lifecycle. This entails strengthening capabilities at every touchpoint to ensure comprehensive protection for both businesses and consumers.”

TransUnion came to its conclusions about Digital Fraud based on intelligence from its identity and fraud product suite that helps secure trust across channels and delivers efficient consumer experiences – TransUnion TruValidate. The rate or percentage of suspected Digital Fraud attempts reflect those that TransUnion customers determined met one of the following conditions: 1) denial in real time due to fraudulent indicators, 2) denial in real time for corporate policy violations, 3) fraudulent upon customer investigation, or 4) a corporate policy violation upon customer investigation — compared to all transactions it assessed for fraud.

Download the TransUnion 2024 State of Omnichannel Fraud Report to learn more. Specific country and regional data in the report includes Botswana, Brazil, Canada, Chile, Colombia, the Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, the Philippines, Puerto Rico, Rwanda, South Africa, Spain, the United Kingdom, the United States and Zambia. 
 

¹https://privacy.gov.ph/dbnmslivestats/

Manila, Philippines, May 2, 2024 – According to TransUnion’s Q1 2024 Consumer Pulse Survey, while almost all (96%) of Filipinos consider credit and lending products to be important factors in achieving their financial goals, greater access to credit remains an issue as only one third of Filipinos (35%) believe they have sufficient access to credit and lending products. That is a noticeable decrease from 46% in Q1 2023. Comparing different generations*, Gen Z emerged as the group who said they had the least access to credit and lending products at 32%, followed by Baby Boomers (30%), Millennials (28%) and Gen X (26%).

The quarterly Consumer Pulse Survey by global information and insights company, TransUnion (NYSE: TRU), explores consumers’ recent personal finance and fraud experiences, and what financial changes they expect in the future.

Buy Now Pay Later sees increased usage among Gen Z

Born in a time of smartphones and social media, Gen Z Filipinos are tech natives who are comfortable carrying out transactions online with 88% saying that they have done so in Q1 2024. As more Gen Z Filipinos become part of the workforce, nearly all (89%) of them expected their income to increase in the next 12 months — the most of any surveyed generation.

Gen Z’s technological literacy and personal financial outlook appeared to contribute to a trend observed with Buy Now Pay Later (BNPL) services — an alternative credit-enabled payment method that allows consumers to immediately finance purchases and pay them back in fixed installments over a relatively short period of time. Among all Filipinos who said they have heard of BNPL (82%), almost two-thirds (63%) said they had made at least one BNPL transaction in the last 12 months compared to 61% in Q1 2023. However, among those in Gen Z who said they have heard of BNPL (81%), an even higher percentage (65%) said they made at least one BNPL transaction in the past 12 months. This is up from 57% in Q1 2023, the biggest increase among all generations. More than two-thirds (68%) of Millennials who claimed awareness of BNPL (86%) said they made at least one BNPL purchase in the same timeframe. 

“It was easy to apply” is the top reason Gen Z said they used BNPL. Some of the other top reported reasons include they just wanted to try it (17%), spreading payments over time (11%) and as an alternative to afford a larger purchase (11%).

“For many Filipinos, Buy Now Pay Later services offer financial convenience and flexibility by letting them tailor their payment terms to best suit their needs and preferences. With the noted increase in usage of such services among consumers, especially the younger generation, businesses and other players in the formal financial sector must develop robust underwriting systems to efficiently cater to the expectations of an increasingly digital savvy demographic. This entails striking a delicate balance between capitalizing on the growing opportunities and mitigating potential risks in terms of operational efficiency and delinquency management,” said Weihan Sun, Principal of Research and Consulting for Asia Pacific at TransUnion.

Gen Z are credit-hungry and proactively seeking out ways to improve their credit  

The act of credit monitoring has also increased with seven-in-ten (70%) Filipinos saying they checked their credit reports at least monthly – an increase of five percentage points from 65% in Q1 2023. This uptick reflects a growing awareness of the importance of credit health and its implications on financial opportunities. Millennials (75%) and Gen Z (74%) are the Filipino generations who said they checked their credit reports at least monthly, followed by Gen X (65%) and Baby Boomers (56%).

The percentage of Gen Z Filipinos who said they do not monitor their credit reports also fell to 14% from 17% in Q4 2023. Over the past year, the percentage of Gen Z Filipinos who said they do not monitor their credit reports fell every quarter — all the way from 29% in Q1 2023.

Among their reasons for regularly monitoring their credit reports, 30% of Gen Z did so to learn of any credit offers they might qualify for, while 34% checked to find ways to improve their credit score. However, both reasons are eclipsed by their need to protect themselves against fraud — a consideration shared by 55% of Gen Z Filipinos.

Younger Filipinos grow adept at spotting fraud attempts

As more Filipinos grow accustomed to transacting online, addressing fraud remains a challenge. Among methods employed by fraudsters, phishing — the deceptive practice of masquerading as a trustworthy entity in emails or via websites to steal sensitive information — was the most reported scheme (49%) among Filipinos who said they were targeted with online, email, phone call or text messaging fraud attempts in the last three months. Other common fraud methods reported were smishing (43%) — similar to phishing but conducted through SMS text messaging — and money or gift card scams — where victims are deceived into sending money or purchasing gift cards under false pretenses (36%).

However, younger segments of the population have shown a growing awareness for spotting scams and fraudulent tactics. The percentage of Gen Z Filipinos who said they were not aware of being targeted by fraudulent schemes in the last three months dropped to 28% from 37% last year.

“As technology advances, consumers now have access to a variety of payment options that cater to their preferences. Yet, alongside the growth of digital convenience comes the inherent risk of fraud. Although it is encouraging to see the increased ability of younger Filipinos to recognize fraudulent schemes, fraudsters remain relentless in their efforts to adapt and exploit vulnerabilities. These dynamics underscore the critical need for proactive fraud prevention strategies which encompass robust security measures and continuous consumer education by financial institutions. As more members of Gen Z enter the consumer market, implementing multi-layered defenses against fraud while ensuring friction-right customer experiences becomes crucial for the long-term success of all financial institutions in the country,” said Sun.

*TransUnion’s Q1 2024 Consumer Pulse Survey was conducted from 6 Feb. to 14 Feb, 2024, and involved 977 Filipino consumers aged 18 years and older. Generations are defined as follows: Gen Z, 18–26 years old; Millennials, 27–42 years old; Gen X, 43–58 years old; and Baby Boomers, age 59 and above.

For more information, please visit the Philippines Consumer Pulse Study web page.

Based on proprietary insights from TransUnion’s global device risk consortium, the analysis found that when the consumer was in the Philippines during the transaction within the Black Friday shopping period, 12.8% of e-commerce transactions were suspected to be fraudulent. While this number was 4.4% higher than the same period in 2022, it was alarmingly 19.0% above the rest of 2023 prior to Nov. 23.

Despite the percentage of suspected e-commerce fraud in 2023 before the holiday shopping season being the lowest in past three years at 10.7%, the rapid uptick during the Black Friday shopping period shows that retailers should remain cautious in detecting and combating fraud to protect themselves and consumers during the busiest business season of the year.    

The Percentage of Suspected E-Commerce Fraud During the Black Friday Shopping Period vs. Overall

“Just as the holiday season drives consumers online to begin shopping for gifts for their loved ones, so does it become a destination for fraudsters seeking to take advantage of this time for their financial gain,” said Yogesh Daware, chief commercial officer at TransUnion Philippines. “Online retailers must ensure that consumers shopping their sites for the best deals are at the same time protected from fraud in the most seamless and friction-right way possible.”

The study also revealed the suspected digital fraud rate for each day during the holiday shopping period in the Philippines. Similar to last year, the suspected digital fraud rate was the highest on Black Friday, November 24.

The Suspected Digital Fraud Rate Varies for Each Day of the

2023 Holiday Shopping Weekend

As part of this analysis, TransUnion also determined the top indicators of fraudulent e-commerce transactions during the holiday shopping season globally, including the Philippines. This year, transactions per IP (triggered by an unusual volume of activity from a single Internet Protocol [IP] address to a customer’s site in a short period) and transactions per device (triggered by an unusual volume of activity from a single device to a customer’s site in a short period) were the leading indicators for potential fraud attempts.

“The days leading up to the Christmas holidays mark the biggest shopping season of the year for retailers in the Philippines, but equipping themselves with the proper tools to detect fraud at the first warning sign is a year-round priority. A critical way to minimize fraudulent transactions while at the same time protecting legitimate ones involves implementing holistic fraud solutions that can verify customer identity and authenticity at the very beginning of a transaction, including both account creation and login,” added Daware.

Consumers Express Concern This Holiday Season

The increase of suspected digital fraud during the traditional busiest days of the holiday shopping season occurred as consumers continue to express concern about being victimized during this popular shopping period. TransUnion’s Q4 Consumer Pulse Study found that 93% of Filipinos consumers are extremely, very, or moderately concerned with being victimized by online fraud this holiday season – a slight increase from 92% in 2022.

TransUnion came to its conclusions primarily based on intelligence from its identity and fraud product suite, TransUnion TruValidate™, which helps secure trust across channels and delivers efficient consumer experiences. The rate or percentage of suspected digital fraud attempts reflect interactions which TransUnion customers either denied in real time due to fraudulent indicators or determined to be fraudulent after a manual review process—compared to all transactions it assessed for fraud.

To find out how this data varies by select countries and more, TransUnion’s holiday fraud insights can be found here.

Manila, Philippines, November 23, 2023 – Filipinos are focusing on building financial resilience through the current high-pressure economic environment: even though a majority (80%) expect their income to increase in the next 12 months, more than half (51%) are saving more into their emergency funds, and more than a third (34%) are accelerating their debt repayments.

This cautious attitude extends to how Filipinos are planning to calibrate their household budgets over the next three months. While some foresee increased spending on bills and loans (43%) and retail purchases (35%), others intend to cut spending on non-essential items (48%), large purchases like cars and appliances (44%), and even digital services (21%). This nuanced approach to managing finances reflects a population that is navigating economic uncertainties with caution.

These are among the findings of the Q4 Consumer Pulse Study into consumer behaviors and attitudes about current and future household budgets, spending and debt, published by TransUnion (NYSE: TRU), a global information and insights company.

Fewer Filipinos see credit as an important factor in achieving financial goals

Fifty-eight percent of Filipinos consider it extremely or very important to use credit to achieve their financial goals, a decrease of six percentage points year-over-year (YoY), down from 64%. However, 63% of Gen Z (born 1995 - 2004) consumers believe that access to credit is important.

Survey findings also showed a noticeable drop in Filipinos’ perception of having sufficient access to financial products. Only 40% believed they have adequate access during Q4 2023, down from 45% during Q4 2022. Only 37% of Gen Z consumers are confident in their potential to access credit.

Despite the unmet demand, more than half (59%) of those that considered applying for new credit or refinancing existing credit, ultimately decided against it. When asked about the reasons that led to their decision, the high cost of borrowing was the primary deterrent (39%), followed by  turning to an alternative funding source (32%) and income or employment status (29%). These challenges reveal opportunities for lenders to further enhance financial inclusion.

With fewer Filipinos recognizing the value of credit, survey findings also revealed a dip in the importance of credit monitoring. Respondents who deemed the practice to be extremely important fell to 35% in Q4 2023, down from 44% in Q4 2022. Daily checks fell to 13% from 18% in the previous year, while 20% of respondents still do not monitor their credit reports at all – a slight increase from 18% in Q4 2022.

“Understanding one’s credit health is an important step in financial management to safeguard a healthy financial future. It helps consumers stay on top of their creditworthiness and be ready for any immediate financing needs in an uncertain economic environment,” said Pia Arellano, president and CEO of TransUnion Philippines. “As a provider of global information solutions, we know that these findings indicate a need to intensify consumer education efforts across the financial system about how access to credit information can affect or benefit an individual’s financial health and enable them to make more informed financial decisions.”

Filipinos are concerned about sharing personal information online

Data from Q4 2023 shows that Filipino experiences with digital fraud remain a leading concern. A significant majority (64%) of survey respondents reported being targeted by fraudsters but did not fall victim to them, while 8% admitted to being defrauded.

In terms of fraudulent schemes, 50% of survey respondents were targeted by phishing attacks (when fraudulent emails, websites or social media platforms are used deceptively), followed by smishing (fraudulent text messages intended to trick recipients into divulging data) at 43%. Voice-call scams (vishing) and third-party seller scams on legitimate online retail platforms were also prevalent, indicating scammers’ diverse array of tactics.

The prevalence of digital fraud is a possible reason that 90% of survey respondents express concern over sharing their personal information. This heightened vigilance reflects an increasing societal awareness of the risks associated with the digital world.

This overarching caution implies the need for better safeguards against digital fraud, especially with reports showing that local online scam victims lost over PHP 155M to various fraudulent schemes from January to August 2023^[1].

“Data privacy safeguards personal identity and promotes trust in digital interactions in an increasingly data-driven world. With the need for increased cybersecurity and other safeguards against digital fraud, TransUnion Philippines continues to educate individuals and businesses alike about emerging fraud trends, providing a suite of identity proofing and fraud prevention solutions to help more people take better control of their online lives,” said Arellano.

TransUnion’s Consumer Pulse Study surveyed 907 adult Filipino consumers from September 27 to October 10, 2023. This quarterly survey examines shifting consumer attitudes and behaviors based on the dynamics of income, debt, and identity theft, with respondents ranging from Gen Z (born 1995-2004), Millennials (born 1980-1994), Gen X (born 1965-1979), and Baby Boomers (born 1944-1964).

For more information, please view the full report of the Consumer Pulse Study.

^[1] https://pia.gov.ph/news/2023/11/08/dilg-sec-ink-moa-to-strengthen-campaign-against-financial-scams

In the first half of 2023, the retail and video gaming industries saw the highest rates of suspected digital fraud globally at 10.6% and 7.0%, respectively, followed by telecommunications at 5.3%. Globally, insurance and logistics were the industries with the lowest suspected digital fraud attempt rate in H1 2023. Among all industries, the suspected digital fraud rate stood at 5.3%, up from 4.5% one year ago.²

“If left unchecked, fraud results in an erosion of trust between consumers and industries. When attempting to measure the impact of digital fraud on any one particular industry or another, it’s not enough to look at fraud rates alone,” said Yogesh Daware, chief commercial officer at TransUnion Philippines. “There are other factors that need to be taken into consideration. These include the overall size of the industry in question, whether the industry is growing and if so, how quickly. Only then can one endeavor to develop a more comprehensive perspective on how digital fraud is impacting these industries. In addition, this can help project where fraudsters may be focusing their efforts moving forward, and help industries take the necessary steps to stay ahead of any developing threats.”

When the consumer is located in the Philippines during the transaction, among all industries, the suspected digital fraud rate stood at 8.2% in H1 2023. For transactions coming from the Philippines, the video gaming industry had the highest suspected digital fraud attempt rate among all industries in H1 2023 at 15.2%. Conversely, the number of digital transactions coming from the Philippines in that industry decreased when comparing H1 2022 to H1 2023 (down 19.4% YoY). While the insurance industry saw the largest increase in digital transactions coming from the Philippines YoY at 160.3%, the suspected digital fraud rate for that industry for transactions coming from the Philippines was 7.1%.²

Insurance Saw the Greatest YoY Growth in Global Digital Transactions while Retail had the Highest Suspected Digital Fraud Rate

Source: TransUnion TruValidate™ data

71% of Filipino Consumers Report Having Been Targeted by Fraud

This new TransUnion analysis comes on the heels of its recent Q3 Philippines Consumer Pulse Study which explored, among other things, consumer awareness of being targeted by any online, email, phone call or text messaging fraud attempt in the last three months. The TransUnion survey of 1,000 Filipino adults was conducted from July 06 to 24, 2023.

The survey found that 62% of survey respondents indicated that they had been targeted by fraud but did not become a victim of it, and 9% had been targeted and fell victim. Among those targeted, the most frequent fraud schemes by which they reported being attacked were phishing (51%), followed by smishing (45%) and money/gift card scam (34%).³

TransUnion came to its digital fraud findings based on intelligence from its identity and fraud product suite, TransUnion TruValidate™, which helps secure trust across channels and delivers efficient consumer experiences. The rate or percentage of suspected digital fraud attempts reflect interactions which TransUnion customers either denied in real time due to fraudulent indicators or determined to be fraudulent after a manual review process—compared to all transactions it assessed for fraud.

Download the Omnichannel Fraud in H1 2023 Infographic for more findings including the rate of suspected digital fraud from select countries and regions globally, and the growing problem of synthetic fraud. Specific country and regional data in the analysis include the United States, Brazil, Canada, Chile, Colombia, Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, Philippines, Puerto Rico, Rwanda, South Africa, Spain, United Kingdom and Zambia.

¹ The first half of the year or H1 refers to Jan 1 to June 30

² TransUnion TruValidate data

³ TransUnion Consumer Pulse Survey

Manila, Philippines, October 11, 2023 – More Filipinos’ household finances have improved over the last three months, according to the Q3 Consumer Pulse Study by TransUnion (NYSE: TRU), a global information and insights company.

The study, which surveyed 1,000 adult Filipino consumers from July 6 to 24, 2023, also showed that more Filipinos are comfortable owning credit products and completing digital transactions. The observed shift in sentiment towards credit products and digital payments corresponds with digital banks and financial technology (FinTech) companies such as e-wallets continuing to establish a foothold in the country. At the same time more Filipinos are also concerned about their safety from cybersecurity threats.

More Filipinos optimistic about income and household finances

Alongside the 4.6% expansion of the Philippine Gross Domestic Product (GDP) observed in Q2 2023^[1], 52% of Filipino survey respondents reported better than planned household finances during Q3 2023 – an increase of three percentage points from 49% in Q2 2023.

Additionally, 44% of respondents in Q3 2023 reported an increase in income over the past three months, a slight increase of three percentage points from 41% observed in the previous quarter. 

Filipinos are growing comfortable with credit

Almost all (96%) respondents to the Q3 2023 survey see access to credit and lending products as an important way to achieve financial goals.

A deeper dive into the findings shows that the number of Filipinos comfortable owning credit accounts such as loans and credit cards increased by six percentage points to 41% in Q3 2023, up from 35% in Q2 2023. This growing comfort with having credit products is also seen in the future plans of more Filipinos. More than half the respondents (51%) indicated they were planning to apply for a new personal loan within the next year, an increase of five percentage points from 46% in Q2 2023.

“Credit can be a powerful tool that helps people improve their lives. It is a very encouraging sign to see more Filipinos growing comfortable with credit and using it to unlock better economic opportunities,” said Pia Arellano, president and CEO of TransUnion Philippines. “The proliferation of digital banks and financial technology players is also a positive sign. These entities are helping to expand access to credit so more Filipinos can enjoy the benefits of financial inclusion.”

Digital banks and FinTechs seen as sources for credit products

The study’s findings also show that Filipinos are accessing credit products from new sources: 32% of respondents said they have existing credit cards or loans from a digital bank – banks with no physical branches who offer financial products and services processed through digital platforms^[2] - while 26% said they have a loan from a FinTech firm.

However, 42% of Filipinos in Q3 2023 said they would still choose the institution that offers them the lowest interest rate when applying for a new digital loan – whether the lender is a traditional bank, digital bank or FinTech institution. While digital banks and FinTech companies have emerged as viable options, these findings are indicative of a discerning consumer base that actively seeks credit products that offer the best terms and conditions.

Aside from seeking affordable credit products, speed of approval also emerged as an influencing factor in choosing credit products: 91% of Q3 2023 respondents cited real time approval when applying for a digital loan being important to them – an increase of three percentage points from Q2 2023.

Cybersecurity seen as a concern with more transactions happening online

More Filipinos now report transacting online. When asked about how many of their transactions are done over the internet, 58% reported completing more than a quarter of their transactions online, an increase of two percentage points from the previous quarter.

Coupled with this rise, cybersecurity also emerged as a concern for more Filipinos. Asked what obstacles they encounter while using digital technology in new ways, 49% expressed concerns about cybersecurity threats – the biggest concern and a three-percentage point increase from the previous quarter.

When it came to the cyber threats Filipinos reported being most concerned about, nearly two thirds (65%) cited stolen identities, over half (51%) data breaches and 45% credit card fraud. Despite growing concerns regarding cybersecurity threats, among those who said they didn’t take action within the last 60 days in response to cybersecurity concerns, 66% said they took no action because they were unsure of what to do – an increase of 11 percentage points from the previous quarter.

“As more aspects of our lives move online, the role of cybersecurity in this progressively internet-centered world is vital. At TransUnion Philippines, we provide a host of identity proofing and fraud prevention solutions to keep fraudsters and other malicious entities from perpetrating crimes against consumers and businesses. TransUnion Philippines is ready to work with financial institutions, businesses, and consumers to provide the education and solutions needed to help keep online spaces safe,” said Arellano.

For more information, please view the infographics of the Consumer Pulse Study. 

^[1] https://www.psa.gov.ph/content/gdp-expands-43-percent-second-quarter-2023

^[2] https://www.bsp.gov.ph/Regulations/Issuances/2022/1154.pdf

Manila, Philippines, September 26, 2023 – Lenders that understand evolving consumer credit needs can confidently grow according to TransUnion Philippines research presented during its recent Big Data Summit. Findings presented show that consumer demand for credit is increasing, with an additional 89% from the total number of inquiries received in Q2 2022. Of those inquiries, 66% were for credit cards, 23% were for personal loans, while the remaining 11% were for housing and auto loans. While credit cards still comprise a majority share of demand, inquiries for personal loans are gaining ground on credit cards. This is driven by digital banks and FinTechs who have entered the market.

Demand for credit is growing outside the NCR

A geographical breakdown of the figures shows that 55% of the total new credit application inquiries received in Q2 2023 came from regions outside of the National Capital Region (NCR). This indicates a reversing trend over the last two years as inquiries emanating from the NCR held the majority share of inquiries received at the onset of the pandemic. This trend can be attributed to expansion policies, with banks, digital banks, and FinTechs establishing footholds in non-NCR regions.

Casting a wider net for New-to-Credit (NTC) consumers

New-to-Credit (NTC) consumers are those with no prior credit history who opened their first ever traditional credit product such as a credit card or auto loan. Analysis showed that of all the new credit application inquiries received in Q2 2023, 26% were from the NTC segment. Primarily driven by unsecured lending, these findings show an increase of five percentage points of the total number of NTC applications tallied in Q2 2022.

With the observed increase in demand over time, lenders are seeing the potential of the NTC consumer segment as an avenue for growth where they can increase their approval rates. However, to maximize growth, lenders need information to make sound decisions in a rapidly evolving acquisition environment.

While credit scoring can identify good borrowers, establishing trust based on a prospective borrower’s identity attributes and address verification can help identify trustworthy borrowers among NTC consumers. By meeting those types of set parameters, such borrowers could enjoy benefits such as Straight-Through Processing (STP), avoiding the need for extensive field investigations.

Harnessing data to better understand consumer behavior

“Understanding consumers more deeply is imperative, now more than ever,” said Pia Arellano, president and CEO, TransUnion Philippines. “Knowledge and data should be the drivers that will empower us to adapt and act accordingly.”

The emergence of alternative data-based credit scoring is another reason lenders have increased confidence in the NTC consumer segment. The World Bank defines alternative data as information gathered from non-traditional data sources^[1]. The availability of alternative data such as telco data provides a valuable tool for assessing the creditworthiness of NTC consumers and enables lenders to find and approve more good customers.

Lenders can also use this data to prudently provide larger credit limits or loans with better terms to NTC consumers. By better understanding the needs of this segment, NTC consumers enjoy better experiences which can go a long way in generating long term loyalty. Already, Filipino consumers’ telco data, including reloads, repayments, mobile data usage and device data, can be included in the calculation of their credit score.
 

What we can do to maximize growth and further increase financial inclusion

While utilizing the power of data can unlock greater economic opportunities for more people, local challenges to financial inclusion persist. One of the biggest insights from TransUnion Philippines’ recently published Credit Perception Index Study was that many Filipinos have a negative perception of credit. To them, credit is associated with bad debt, overspending, and financial irresponsibility. Alongside a preference for traditional financial products, these reasons could be influencing factors for why the penetration rate for credit cards in the country stands at only 25%, compared to countries like the United States and Hong Kong where the percentages of adults who own credit cards stand at 70% and 69%, respectively.

While demand for credit cards may be growing, there remains a need for the formal financial sector to work together to educate Filipinos on the benefits of credit products, and address misconceptions surrounding credit to improve financial inclusion in the country.

“Clearly, there’s significant work to be done to change perceptions. Just as it takes a village to raise a child, it will take sustained collaboration to build the road to financial literacy and inclusion in the Philippines,” said Arellano.

^[1] https://blogs.worldbank.org/psd/how-can-alternative-data-help-micro-small-and-medium-enterprises-msmes-access-credit-0

Manila, Philippines, July 25, 2023 – Findings from the latest quarterly Consumer Pulse Study by global information and insights company and the Philippines’ first comprehensive private credit reference agency, TransUnion (NYSE: TRU), show that Filipinos are optimistic of their financial situations changing for the better amid the country’s continued economic upturn.

Alongside improved consumer sentiment, Gen Z Filipinos were the demographic with the biggest increase in in-store and online purchases as well as plans to increase non-essential spending. Younger Filipinos also led an increased understanding in the importance of credit monitoring, with report accuracy the top factor for doing so amid the lingering threat of fraudulent schemes targeting consumers.

Economic recovery boosts consumer attitudes towards household finances

Despite the economic recovery observed in 2022 and a continued expansion of the Philippines GDP to 6.4% in Q1 2023^[1], household finances did not keep pace. The percentage of respondents reporting worse than planned household financial situations increased to 27% in Q2 compared to 25% in Q1. Respondents who were earning higher income in the past three months also decreased from 45% in Q1 to 41% in Q2.

Even with slightly worse household finances reported among respondents, an improving economy buoyed consumer sentiment – with the percentage of consumers optimistic about their household finances in the next year up from 81% in Q1, to 84% in the latest survey. The improvement in the economy as well as consumer confidence also showed in the number who expected to be better able to meet their debt obligations. More than half (59%) said they expected to be able to pay at least one of their current bills or loans in full, a four-percentage point improvement over last quarter.

Improved consumer sentiment influenced spending as well. On the topic of how consumers expected their household spending to change over the next three months, 31% indicated they plan to increase it – up two percentage points compared to Q1 results. There was also a notable increase seen in the percentage of consumers who reported same or increased in-store and online purchases, tallying 61% in Q2, a two percentage point increase from Q1.

“Survey results showed that Gen Z consumers were seen to have the highest increases in both purchases made and plans to increase discretionary spending,” said Pia Arellano, president and CEO of TransUnion Philippines. “With the momentum of the economy and relaxed COVID-19 restrictions, there are now more avenues for younger Filipinos to allot their finances beyond paying for necessities. These changing spending habits could also give insight into their attitudes towards credit as well.” 

Gen Z leads charge for new credit product applications

While the percentage of consumers planning to apply for a new credit card remained unchanged, there was a decrease in consumers planning to apply for a personal loan – down from 52% in Q1 to 46% in Q2. Rising interest rates were one of the reasons given as impacting consumers’ decisions to apply for credit in the next year, with 84% of consumers saying rises were moderately or highly likely to impact their decision to apply for credit, up two percentage points from the previous quarter. 

Despite the negative impact of rising interest rates, there is a growing percentage of Gen Z consumers who see credit as an important financial tool. Among Gen Z consumers, 68% said that access to credit and lending products is extremely or very important to be able to achieve their financial goals, jumping three-percentage points from Q1 findings.

Gen Z consumers also demonstrated a strong desire to apply for new credit as well. Compared to Q1 results, more (a 10-percentage point increase) Gen Z consumers were planning to apply for a new credit card, more (a four-percentage point increase) for a new personal loan, and more (a three-percentage point increase) for a new Buy Now Pay Later (BNPL) product. These figures show a contrast to the reduced desire of some other generations to apply for new credit products.

Younger consumers place high importance on credit monitoring

More consumers recognized the importance of monitoring credit reports as 41% of respondents saw this as “very important” in Q2. These findings mark a six-percentage point increase from the previous quarter. Among reasons why respondents checked their reports, report accuracy was seen to be the top factor at 61%, jumping nine-percentage points higher than in Q1.

“Credit understanding and effective management are key elements of financial health. Being knowledgeable about the state of your credit is a fundamental part of being an informed consumer,” said Arellano. “Insights from our study show younger consumers increasingly engaging with the value of credit monitoring services. This is a positive sign that Filipinos are looking to take better control of their finances, ultimately enabling them to gain greater access to and responsibly use credit to unlock increased economic opportunities.”

Among different credit products, consumer awareness towards BNPL services continued to increase, with 21% of respondents using a BNPL service once in the past year, up three percentage points from last quarter. In terms of population demographics, awareness of BNPL services grew the most among Gen Z, up from 77% in Q1 to 80% in Q2. Increases were also seen in other demographics as well, except for Baby Boomers whose awareness decreased from 78% in the previous quarter to 73% in Q2.

More Filipinos cautious of identity theft

Fraud attacks continue to be a major threat to consumers as 69% of respondents reported being targeted by a fraud scheme, up three-percentage points from Q1. Among fraudulent schemes targeting consumers, phishing emerged as the most common tactic used, with 52% of consumers saying they were targeted by this method in the past three months.

At 88%, almost all respondents expressed concerns on sharing personal information. When asked on the reasons for their concerns, 80% of respondents cited invasion of privacy, unchanged from the previous survey period. However, 76% of respondents reported the risk of identity theft, up five percentage points from the previous quarter.

“When your personal information is exposed to malicious individuals out to exploit your finances, the potential negative implications are significant,” said Arellano. Organizations must also take definitive measures to safeguard the personal information and hard-earned finances of their customers. The sooner a case of identity theft is spotted, the more likely will fraud be prevented. At TransUnion Philippines, we provide a host of identity proofing and fraud solutions for businesses and consumers to help make trust possible – only by coming together can we more effectively combat fraudsters.”

TransUnion’s Consumer Pulse Study surveyed 907 consumers in the Philippines from May 4-19, 2023. This quarterly survey examines shifting consumer attitudes and behaviors based on the dynamics of income, debt, and identity theft, with respondents ranging from Gen Z (born 1995-2004), Millennials (born 1980-1994), Gen X (born 1965-1979), and Baby Boomers (born 1944-1964). For more information, please view the full report of the Consumer Pulse Study.

^[1] Philippine Statistics Authority | Republic of the Philippines (psa.gov.ph)

Manila, Philippines, June 15, 2023 — New-to-credit consumers – those early in their credit journeys – in the Philippines and across the globe generally gain access to credit from their first application, and are satisfied with the amount of credit they receive. The study found that on average, over 60% of NTC consumers globally said their need for credit will increase in the next three to five years, with the highest levels in developing markets (led by India at 79%). Approximately 61% of NTC consumers in the Philippines stated their need for credit will rise in this same timeframe.

These and other findings from a newly released TransUnion (NYSE: TRU) global study, “Empowering Credit Inclusion: A Deeper Perspective on New-to-Credit Consumers”, give insights to lenders in both developed and developing credit markets on how to approach additional credit needs from new-to-credit consumers, as well as what these consumers value most in their loan providers.

The study included an online global survey of consumers in the Philippines Dominican Republic, Brazil, Canada, Colombia, India, the United States, and South Africa, as well as credit bureau data and insights about millions of new-to-credit consumers in varied global markets, including Canada, Colombia, Hong Kong, India, South Africa, and the United States. TransUnion defined a new-to-credit (NTC) consumer as one with no prior credit history on their credit bureau file who opened their first-ever, traditional credit product such as a credit card, personal loan or another loan type unique to individual regions. The study then examined the behaviors and performance of those new-to-credit consumers over the subsequent two years after opening their first credit product. 

“A particular focus around the topic of financial inclusion is credit inclusion – the ability of consumers to access traditional lending products, such as credit cards, personal loans and mortgages. These products serve as a means to financial mobility for consumers and can be a gateway to a better quality of life, enabling homeownership, business formation and wealth creation,” said Pia Arellano, president and CEO of TransUnion Philippines. “The more consumers who can participate in credit markets in a region, the greater the opportunities for broad economic inclusion. The data from our global study demonstrate that new-to-credit consumers are often good risks who are hungry for credit and will show loyalty to those financial institutions that offer them their first credit accounts.”

Over half of NTC borrowers get approved on the first application

The online global survey set out to understand the voice of NTC consumers, and included responses from 8,465 NTC consumers from a range of markets.

According to the study, among Filipino consumers surveyed, more than half (52%) said their first credit products were approved on their first applications, with 90% being satisfied with the amount of credit they received. A personal loan was cited as a first credit product opened by 50% of NTC Filipinos, followed by credit card as the next most common product opened. These products both offer liquidity to consumers, giving them flexible access to credit, which is likely a driving need for consumers entering the credit.

Other Filipino NTC consumers chose student loans, payroll loans and auto loans as their first products in building a credit profile.

The study found that new expenses were the primary driver for opening a first lending product in nearly all markets, excluding the United States and Canada, where having access to a convenient means of spending was the top motivator. In the Philippines, 57% of NTC consumers opened their first credit product in response to a new expense, and 48% did so to access a more convenient means of transacting.

The study also found that convenience is the top criterion in choosing a lender among NTC borrowers in all regions except Brazil, suggesting opportunities for lenders to tailor their products to capture the NTC segment. In the Philippines, 47% of consumers cited convenience as their top factor, with 23% saying that they chose an institution based on recommendations by friends or family.

Financial literacy key to unlock opportunities

The survey findings also indicated that 44% of NTC consumers in the Philippines would expand their use of credit if their payments were lower, with 40% saying that they would do so if better credit offers were available. A future life event – like getting married or having a child – would see 37% of Filipinos expanding their credit portfolio. In addition, 36% of Filipino NTC consumers would expand their use of credit if they received education about the availability and benefits of credit, and 34% would do so if they had more clarity on the total cost of credit, including fees and interest.

However, 46% of Filipino NTC consumers stated that they don’t want to expand their use of credit because they don’t want to lose control of their finances, while 44% said it was because they don’t want to get into more debt.

“These concerns may be due in part to their relative inexperience with credit, and limited understanding of their credit capacities and successful credit management behaviors. Empowering new-to-credit consumers with education tools around budgeting, credit monitoring and other facets of credit management can help build confidence and increase their understanding of credit as a useful tool for achieving financial goals and creating a better life,” said Arellano.

NTC Filipinos are embracing online financial services, with 67% completing up to half their transactions online, with a further 24% saying the same for between half and three quarters of their transactions. Of those that apply for a loan via a website or mobile app, 74% say that real-time approval is very important, demonstrating consumers’ expectations that lenders will have immediate access to their credit history, so that they can respond to applications expeditiously.

“New-to-credit consumers in the Philippines and around the world appear to have a need for credit to improve their lives, and understand the risks of taking on too much debt,” Arellano said. “At the same time, many Filipinos are held back from accessing credit because of their lack of financial visibility. Where traditional data is not available to give financially ‘invisible’ Filipinos a credit score, lenders can and should leverage alternative data such as telco data to help score consumers with little to no credit history. This will enable more people to be visible in the formal financial system and, on a greater scale, empower building a nation of well-informed consumers confidently making sound financial decisions to improve their lives.”

For detailed information about all global markets represented in the study, please click here.

Government institutions, businesses and financial institutions all have a role to play in making digitalization and financial inclusion possible, as they work together to provide solutions and services that fulfill their roles as economic enablers, empowering more people to participate in the formal financial system.

For example, The Bangko Sentral ng Pilipinas (BSP) designed a three-year digital transformation roadmap hinged on strengthening customer preference for digital channels, and the creation of more digital financial services that make the innovative use of consumer data possible.

This roadmap is already yielding results. In 2021, the share of digital payments based on volume was at 30% - strong progress in the BSP’s goal of converting 50% of the total volume of payments into digital form. This figure is significant considering that payment services are the gateway of most Filipinos to the formal financial system. 

With the BSP focusing on four enablers that will lead the digital transformation of the local financial sector – Payments Digitalization, Digital Banking Framework, Open Finance Framework, and a Regulatory Sandbox – it is responding to public demand for faster, more convenient, and secure financial products and services by creating an environment that encourages innovation to flourish.

The Philippines’ Department of Information and Communications Technology (DICT) supports this. With its  mandate to spearhead the national ICT development agenda, this includes improving internet connectivity across the nation and the development of the National ICT Portal for effective data consolidation and dissemination. These efforts help promote digital transformation in the government to facilitate better public service delivery.

Key initiatives include the adoption of a Cloud First policy for government administration and the delivery of services, the creation of a National Government Portal (NGP) to serve as a one-stop shop for government data, information, and services, a Central Business Portal for all business registration needs, and the Electronic Know Your Consumer (eKYC) for financial institutions, businesses, and local government units to verify identities through a higher degree of automation.

Broadening the scope of digital financial inclusion in the country can be transformational for Filipinos who lack effective access to formal financial services. The most recent TransUnion Consumer Pulse Study highlights that a growing percentage of Filipinos are more comfortable with transacting online, with 77% of respondents using digital financial services – up from 73% in the previous quarter.

When asked about the percentage of transactions they complete online, only 5% of respondents reported not carrying out any online transactions. For those who do, 5% conducted 76-100% of their transactions online, 22% reported doing 51-75% of their transactions online, 35% did 26-50% of their transactions digitally, while 34% accomplished anywhere from 1-25% of their transactions online.

As the country continues to shift towards a digital financial system, we recognize that both technological advancements and the vast amount of data produced by businesses are important contributors in developing the local economy. Data allows businesses to make more informed decisions and helps form a reliable basis for trust. The volume of data constantly generated and processed provides more timely and robust insights into how consumer behaviors can change. This highlights the need for businesses to respond swiftly to those changes.

Inclusive digital financial efforts can also bring in a new generation of data footprints, allowing financial institutions to reach out to consumers who were previously overlooked. The further analysis of data leads to knowledge and solutions. These solutions in turn present opportunities to create new financial products and services for both consumers and businesses. By creating greater access to credit products and services, lenders can attract and build loyalty among segments of the population who are credit invisible.

Through analytics, integrated solutions, and insights, TransUnion is dedicated to finding innovative uses for information and the insights derived from it, to make better and smarter decisions. To bridge the gap between consumers and businesses, TransUnion harnesses the power of alternative data such as mobile data, including reloads, payments, mobile data usage, and device data in CreditVision^TM Link, launched in country last year. This enables lenders to expand their reach by accurately scoring those with little to no formal credit data to assess their creditworthiness and create behavioral insights that can open opportunities for consumers and lenders to engage.

As the Philippines undergoes digital transformation and with more Filipinos growing increasingly comfortable with transacting digitally, the challenge of ensuring information security remains. To help both businesses and consumers transact with confidence, TransUnion uses data, software, and technology to provide comprehensive profiles of consumers so they can be safely and reliably represented. This is what it means to use “Information for Good”.

Digital transformation and collaboration are pillars to driving more inclusive growth for our country. Data solutions offer new perspectives that promise more accurate, efficient, and inclusive results. As a provider of information solutions, TransUnion utilizes data to lay the foundations of mutual trust between businesses and consumers. Through the power of information, they make better financial decisions that can aid in our economic recovery.

In fact, most Filipinos (76%) agreed the economy is either already in a recession or will enter one by the end of 2023, while almost half (44%) cited inflation for everyday goods as their biggest concern affecting their household finances for the next six months.

According to the Philippine Statistics Authority (PSA), inflation increased to 6.9% in September, up from 6.3% in August, as food and energy costs continue to increase.¹ The hike may push the central bank to further increase rates and borrowing costs for businesses and consumers.

Filipinos reduce spending, build savings

Recent findings from the Q3 TransUnion Consumer Pulse study, an August 19-September 1 survey of 1,013 Filipino adults, found that inflation was the leading household financial concern over the next six months followed by a possible global recession. Additionally, in anticipation of a possible recession, 66% said they are building up savings.

These financial concerns could be exacerbated by fewer Filipinos (78% compared to 81% in Q2 2022) expecting their incomes to go up in the next 12 months. Baby Boomers (72%) and Gen X (58%) reduced their discretionary spending the most among age groups in the past three months, and Gen Z (69%) and Millennials (62%) said they saved more in emergency funds in the last three months compared to other generations.

When it comes to future spending, Filipinos said that their greatest spending increases in the next three months are likely to be on bills and loans, medical care/services, and retirement funds and investing. They said they are least likely to spend more on large purchases like cars or appliances.

Additionally, 47% of respondents who said they won’t be able to pay at least one of their current bills and loans in full said that they will pay a partial amount for these. Gen Z (58%) and Millennials (55%) who said they expect to be unable to pay at least one of their current bills and loans in full also said that their leading choice of funding to pay these is by using their savings. 

Credit is an option to cope with inflationary pressure

Nearly every respondent said they believe having access to credit and lending products is important in achieving financial goals, and 56% said that they were planning to apply for new credit or refinance existing credit within the next year. More than half (54%) of Filipinos who said they plan to apply for new credit within the next year said that they would apply for a new personal loan, while 41% said that they’ll apply for a new credit card.

Across generations, 63% of Millennials said they plan to apply for new credit or refinance existing credit within the next year, with 60% of Gen Z saying the same. Additionally, as Filipinos cite stagnant income growth, more consumers said they used a payday loan in the past 12 months (18% in Q3 compared to 14% in Q2 2022).

More respondents (83%) believed that monitoring their credit is extremely or very important, up from 80% in the previous quarter.

A significant percentage, particularly among Millennials (33%), said they conduct more than half of their transactions online.

Separately, a vast majority (89%) remained concerned about sharing their personal information. This may be connected to more consumers saying they were targeted by digital fraud in the last three months but did not become a victim of it.

“As more Filipinos’ financial literacy improves, TransUnion is optimistic that more people will have the knowledge and tools they need to make responsible financial decisions, particularly at a time when economic indicators reveal a stressed environment,” said Pia Arellano, President and CEO of TransUnion Philippines. “Filipinos are highly adaptable, but it takes a community, including the corporate and banking sectors, to come together to achieve greater financial inclusion and economic recovery and growth.”

The complete TransUnion Consumer Pulse Study can be viewed here.

¹Inflation rises to 4-year high at 6.9% in September as food, energy costs surge (cnnphilippines.com)

The drop in the rate of suspected digital fraud in the country was consistent with the decline in global digital fraud observed within the same timeframe.

TransUnion came to its conclusions about fraud against businesses based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™. The percent or rate of suspected digital fraud attempts are those that TruValidate customers either denied or reviewed due to fraudulent indicators compared to all transactions that were assessed for fraud.

Suspected digital fraud attempts focus on specific industries

Despite the overall decrease in suspected digital fraud coming from the Philippines across different industries, suspected fraudsters have honed in on specific sectors. The logistics industry had the biggest year-on-year growth in suspected digital fraud attempts coming from the Philippines among all sectors at 236%. Based on data from April 1 to June 30, 2022, shipping fraud was the top logistics-focused form of digital fraud across the world. Common examples of this type of fraud include instances where buyers fabricate shipping addresses, or when sellers receive payment for goods or services, but never ship to buyers.

The telecommunications industry posted the second largest year-on-year increase in the rate of suspected digital fraud coming from the Philippines at 45%, while gambling placed third with a 32% uptick.

Addressing fraud for greater public trust

Digital fraud continues to be a constant in the lives of many Filipino consumers. TransUnion’s latest Consumer Pulse Study found that 45% of Filipino adults questioned May 26 to June 7, 2022 reported being targeted by online fraud schemes but did not become a victim in the last three months. However, 11% said they ended up as victims of activities such as phishing, money scams, or third-party seller scams on legitimate online retail sites in the last three months.

“With more Filipinos choosing to transact online, fraudsters will continue to capitalize on any opportunities to exploit both consumers and businesses,” said Pia Arellano, President and CEO of TransUnion Philippines.

“As the Philippines continues its rapid acceleration into a digital economy, organizations must take decisive steps to stay ahead of any present and emerging form of fraudulent activity. By instituting strong fraud and authentication practices, and streamlining processes to reduce manual reviews and customer interrogations, organizations can reduce costs and increase revenue while building greater trust with the Filipino public,” she added.   

For worldwide and regional breakdowns around how much the suspected digital fraud attempt rate recently changed, what types of fraud are most prevalent in certain industries and more, please download the infographic.

Suspected Digital Fraud Attempts Shift to New Industries

- Fraud Rate Change from Q2 2021 to Q2 2022

These findings are set against the recent backdrop of the Philippine Statistics Authority (PSA) reporting that inflation reached 6.1% for the month of June – the highest in almost four years³. The uptrend in inflation was due to higher prices for different items and services⁴. Additional findings from the PSA also showed a decline in the purchasing power of the local Peso, highlighting how the value of PHP1 in 2018 is equivalent to only PHP0.87 in June 2022⁵.

Filipinos tighten financial belts

The results from the latest TransUnion Consumer Pulse (May 26-June 7 of 1,005 Filipino adults) showed a palpable shift in how consumers allocate and manage their finances. While 43% of respondents reported an increase in household income in the prior three months, the same percentage of respondents said they decreased discretionary spending such as dining out and traveling in the same time period. Among generations, Gen X (born 1965-1979) and Baby Boomers (born 1944-1964) reported cutting back the most at 49% and 47%, respectively.

A large number of Filipino consumers (42%) are planning to maintain this trend over the coming three months. In terms of large purchases such as appliances or cars, 61% of respondents expected their spending to decrease or stay the same. On the other hand, most respondents (48%) expected to spend more on bills and loans over the same timeframe, the category with the highest reported spending increase.

In terms of the ability to meet financial obligations, 46% of respondents reported being unable to pay at least one of their current bills and loans in full. To maintain the payment of bills and loans among those who said they’ll be unable to pay at least one bill or loan, 46% of respondents intend to use money from savings. At almost half (49%), Gen Z respondents (born 1995-2004) reported preferring this method the most among all generations.

Credit seen as financial enabler

Most Filipinos (96%) believe in the importance of having access to credit and lending products to achieve financial goals. Almost half of all respondents (43%) surveyed believe they have sufficient access to credit and lending products. Baby Boomers led the pack at 55% while Millennials (born 1980-1994) and Gen Z followed at 44% and 41%, respectively.

Over half (55%) of all respondents reported planning to apply for new credit or refinance existing credit within the next year. Baby Boomers led generations with 62% of respondents reporting credit application plans, with Millennials second most likely at 57%.  

Among respondents with plans to apply for new or refinance existing credit in the next 12 months, most expect to apply for new personal loans (53%), and new credit cards (41%). In comparison, over a third (35%) plan to apply for a new mortgage or home loan and almost a quarter (24%) for new car loans. Conversely, over half (59%) of respondents considering applying for new credit or refinance existing credit ultimately decide against it. Some cite the high cost of new credit or refinancing (32%), while others believe that income or employment status would serve as a reason for their rejection (30%).

Additional findings on the reasons for abandoning applications for new credit show that the lengthy amount of time spent awaiting a decision was the third highest factor for more Filipinos (29%), and finding an alternative funding source was the fourth highest (27%).

“Credit can act as a catalyst for economic growth, but many consumers feel excluded or are rejected for credit because lenders can’t accurately assess their credit risk. By using enhanced digital journeys and improved insights, lenders can more accurately price loans and manage risk. Our latest Consumer Pulse Study found that 54% of consumers believed their credit scores would increase if businesses used information not on a standard credit report. This use of alternative data in credit scoring and decisions can significantly increase levels of financial inclusion across the country – enabling greater access to credit for more Filipinos during these challenging times.” said Pia Arellano, President and CEO of TransUnion Philippines.

The complete TransUnion Consumer Pulse Study can be viewed here.

[1] Quarter-on-quarter PH GDP growth could end in Q2 | Inquirer Business

[2] UK think tank: ‘Revenge spending’ in PH likely over as savings dry up | Inquirer Business

[3] https://psa.gov.ph/statistics/survey/price/summary-inflation-report-consumer-price-index-2018100-june-2022

[4] https://ph.news.yahoo.com/philippines-inflation-hits-61-in-june-091550283.html

[5] https://www.gmanetwork.com/news/money/economy/837074/p1-in-2018-was-worth-87-centavos-in-june-psa/story/

“Our global study clearly points to hundreds of millions of consumers around the world being credit unserved or underserved,” said Pia Arellano, regional president and CEO of TransUnion Philippines. “These credit disadvantaged consumers are often unable to access financial products and services because they have no, or little, credit history. This study served to better understand how many people are truly under- or unserved from a credit perspective, while also determining paths for them to gain more credit opportunities.”

The credit data portion of the study explored the characteristics and behaviors of credit unserved and underserved consumers, while offering key insights into their credit journeys. The online global survey gathered sentiment from unserved and underserved consumers on the topic of credit. Unserved consumers are defined as any adult person who has never had an open traditional credit product. The underserved population have minimal credit participation, limited to a single type of credit product and no more than two open accounts of that type, and have been active in the credit market for at least two years.

This study specifically excluded new-to-credit consumers—those who have opened their first product within the past two years—from the underserved population, as many of those new-to-credit consumers become more fully credit active soon after opening their first product. The study sought to understand those consumers who remain unserved or underserved over a longer time period.

Majority of Consumers Looking for New Credit Products

TransUnion commissioned an online global survey of more than 11,100 adults (ages 18 years and older) across multiple markets to gain a better understanding of unserved and underserved consumers’ beliefs, attitudes and experiences with credit that may be influencing their needs and behaviors.

Survey findings indicated that despite unserved and underserved consumers’ lack of credit experience, they understand the benefits and risks of credit and want to maintain control of their finances. In the Philippines, more than half of both unserved (51%) and underserved (52%) consumers expected their need for credit to increase in the next three to five years. Not wanting to incur debt was cited by 53% of unserved and 52% of underserved consumers as the reason they didn’t take on more credit, or any credit in the case of the unserved consumers. Concern about losing control of finances was also a reason given by 40% of underserved consumers for not taking on more credit. This implies that a majority of consumers are looking to gain more access to credit and leverage credit for their financial needs. Globally, the desire to avoid debt was the most commonly cited reason for not wanting more credit, with the exception of Canada.

Most Common Reason Unserved and Underserved Consumers

Responded They Did Not Want Credit / More Credit

Across the globe, survey respondents cited they are planning to apply for credit in 2022 to varying degrees. In the Philippines, 39% of unserved consumers – those without any credit products – plan on applying for credit, compared to 51% of underserved consumers. The material percentage of both consumer groups who intend to seek credit indicates there is a real need for, and interest in, credit. Finding ways to meet the needs of this large population of consumers while prudently managing risk represents a significant growth opportunity for lenders.  

Age Distribution Skews Younger for Unserved Consumers

In the Philippines, the age distribution of unserved compared to underserved consumers varied significantly. Unserved had a much higher percentage of 20-29 year-olds, representing almost half (48%) of consumers in this segment. For underserved this was a much smaller percentage at just over a quarter (28%). Correspondingly, unserved had fewer 40+ year-olds (16%), compared to underserved (33%).

Arellano observed: “As may be expected, we saw a larger percentage of younger consumers in the unserved category, likely because many of them are often at the beginning of their credit journey. At the same time, our research does still point to a large portion of the consumer population that lenders need to work hard to accommodate. The unserved population have never had a traditional credit product and as such can be ‘credit invisible’. However, by using alternative data and advanced techniques, lenders can broaden their reach by accurately scoring consumers with little to no formal credit data. By offering young Filipinos access to finance when they need it most, lenders can build lifetime loyalty and help our economy grow.”

Credit Savvy Consumers Want Better Credit Offers and Better Experiences

The survey findings also indicated that 32% of underserved consumers in the Philippines would expand their use of credit if they had lower weekly or monthly payments. High interest rates were the most common reason both unserved (22%) and underserved (36%) consumers rejected credit offers. This was a common theme observed across the globe, with both unserved and underserved consumers from Brazil, Colombia, and the United States, as well as underserved consumers in Canada, indicating high interest rates as a top reason to decline a credit product offered to them. In the Dominican Republic, both unserved and underserved consumers indicated the top reason for rejecting a credit offer was that the consumer did not need credit anymore, which was also true of unserved consumers in Canada.

Most Common Reason Underserved and Unserved Consumers

Did Not Accept a Credit Product Offered to Them

Consumer experience also played a role in reasons why unserved and underserved consumers would reject a credit offer. A lengthy approval process was cited as a factor in credit offer rejection for 17% of unserved and 8% of underserved consumers in the Philippines. In addition, 16% of unserved and 13% of underserved consumers said they rejected credit offers because they found alternative funding or received a better offer. 

“It’s clear that consumers, even those with little or no credit experience, expect affordable interest rates and monthly payments, along with great consumer experiences. Lengthy approval processes or otherwise negative experiences can lead to a consumer declining an offer of credit. As the cost of credit can often be a deterrent to bringing more consumers into the credit ecosystem, it’s important for financial institutions to develop and offer tailored credit products and services that address these concerns and needs. Furthermore, a seamless consumer experience is a key consideration for lenders when reaching out to unserved and underserved consumers,” said Arellano.

Unserved or Underserved? Survey Confirms Varying Levels of Credit Satisfaction

When comparing the consumer sentiment of unserved consumers with underserved consumers, there tends to be a pronounced difference in the level of satisfaction with their current amount of credit. In the Philippines, 49% of underserved consumers were satisfied or extremely satisfied with their current amount of credit, while only 28% of unserved consumers, those with no traditional credit currently but who may be borrowing from alternative sources, had the same level of satisfaction. Additionally, 21% of unserved consumers were not satisfied at all with their level of credit while only 11% of underserved consumers expressed dissatisfaction. This potentially speaks to differences in awareness of the potential uses and benefits of credit between those with some limited credit activity and those with no credit at all.

“Promoting financial inclusion starts with gathering a better understanding of the different nuances between the unserved, underserved and served populations and what makes them tick. For example, what drives unserved consumers to apply for credit, and why underserved consumers may need a different credit product, may vary greatly. Lenders can use these insights to better meet the unique needs of these consumer segments, and to educate these unserved and underserved segments on ways they can build and improve their credit profiles. In doing so, lenders can play a critical role in helping more consumers become actively engaged in the credit system and promoting greater financial inclusion,” concluded Arellano.

For more information and insights on the global TransUnion study, “Empowering Credit Inclusion: A Deeper Perspective on Credit Underserved and Unserved Consumers,” please download the report.

ⁱ Unserved: Consumers that have never had an open traditional credit product, based on reported accounts on the TransUnion consumer credit database. To size the unserved, we started with the total adult population as reported by the United Nations. We then subtracted the underserved, new to credit and served consumers. The remaining number is the unserved.

ⁱⁱ Underserved: Consumers with some, but limited, credit presence. Specifically, they have:

·       Been active in the credit market for at least the past 2 years

·       0-2 currently open traditional credit accounts

·       Only ever held 1 type of credit product

ⁱⁱⁱ TransUnion’s online global survey included responses from 11,128 adults and was conducted between August 3 2021 – January 5 2022 by TransUnion in partnership with third-party research provider Qualtrics^® Research-Services.

Born between 1995 and 2004 for our survey purposes, Generation Z is becoming an increasingly important driver of economic growth. They comprise one-quarter of the world’s population–that’s about 2 billion–and an even greater percentage (40%) of the Philippines’ population at 40 million.* They are dynamic digital natives with a voracious appetite for information and staying connected and updated. Not surprisingly, close to 99% of Gen Zs have access to a smartphone connected to the internet and around 73% of them spend much of their time online.**

With Gen Z in ascendancy, it’s important to ask what makes them tick? What keeps them busy online? Where do they choose to spend their money? How has the global pandemic changed their money management habits and do they have sufficient access to credit to achieve great things?

Providing insight into Gen Z Filipinos and other generations, the TransUnion Consumer Pulse Study***is conducted quarterly and measures the attitudes and behaviors of consumers in the Philippines and in other international markets. Its results help organizations plan products and services that can better serve consumers’ financial needs and better understand their motivators and how they conduct their personal finances.

According to TransUnion’s research, exactly half of Gen Z consumers plan to apply for new or refinance existing credit in the next year, in particular, by applying for a new personal loan (47%), a new mortgage, home loan or bond payment (37%), or a new credit card (35%). This reflects an opportunity that credit providers can address. Access to credit is an important step in everyone’s financial journey. In the long-term, effective access to credit helps build loyalty, improve financial inclusion in the country and can act as a catalyst for economic growth.

Consumer awareness and interaction with credit is increasing

In the Philippines, consumer attitudes to credit are changing. The same TransUnion study found that 88.6% of Filipinos believe in the importance of credit monitoring, and 48% agree that their credit scores would improve if financial institutions accounted for non-standard information such as rental payments and buy now, pay later loans as part of the assessment of their credit score.

The study also found that Gen Zs in the Philippines said they spent their money from Nov. 2021 to Feb. 2022 on adding or expanding digital services (35%) and adding to their subscriptions/memberships (24%). In addition, 30% stated they increased their discretionary spending (dining out, travel, entertainment), while 28% cut back on it. These shifts are, in part, due to the ongoing global COVID-19 pandemic but are also a reflection of the needs of this increasingly financially active generation.

In terms of financial management, also a carryover of the pandemic, Gen Zs have prioritized paying off debts and building up their savings. This is evident in the 56% who said they decided to save more in their emergency fund, 30% who stated they paid down debt faster and 28% who claimed they saved more for retirement from Nov. 2021 to Feb. 2022. Forty-seven percent of Gen Zs said they will use their money from savings to pay their current bills and loans and 33% plan to borrow money from friends or family for that purpose. Despite about half of Gen Z expecting to be unable to pay some of their debts, they are trying to come up with ways to do so eventually; 36% of them plan to at least pay partial amounts on their existing accounts, 13% plan to request for a payment holiday or other accommodation from lenders and 10% will refinance or renegotiate payments/rates.

"The disaggregated data from our quarterly Consumer Pulse Survey allows us to gain valuable insight on the trends in saving, spending, and overall consumer habits of Filipino Gen Zs. The information we gather can help different organizations and institutions better tailor-fit products and services for this very mobile and tech-savvy generation," said Pia Arellano, CEO and president of TransUnion Philippines.

###

* Ng, J. (2022). Brands Get Ready: Gen Z Are Growing Up. Retrieved 24 May 2022, from https://www.pana.com.ph/fyeo/materials/Engaging%20Generation%20Z_PANA%20.pdf 
** Wise, J. (2022). Gen Z Statistics 2022: How Many People Are In Gen Z?. Retrieved 24 May 2022, from https://earthweb.com/gen-z-statistics/

*** Online survey of 1,078 adults in the Philippines conducted Feb. 8–23, 2022

The suspected digital fraud rate originating from the Philippines decreased in Q1 2022, declining -16.4% from the same quarter last year. This is consistent with the global digital fraud rate that decreased -22.6% in Q1 2022 from Q1 2021. TransUnion’s (NYSE:TRU) quarterly digital fraud analysis observed that in the Philippines, the suspected fraud rate in Q1 2022 declined year-over-year (YoY) in industries such as gaming, financial services, and retail at -27.6%, -24.5%, and -23.2%, respectively.

Certain business sectors, however, were more prone to digital fraud attempts originating from the Philippines, with the logistics industry exhibiting the greatest YoY growth among all sectors in Q1 2022 (104.5%). This growth possibly reflects fraudsters trying to take advantage of the continued challenges within that industry as retailers struggle to ship goods in a timely manner. The logistics industry was mostly impacted by shipping fraud – which is when a buyer spoofs a shipping address or when a seller receives payment for goods or services, but never ships to the buyer. The gambling industry saw the second largest increase in the rate of suspected digital fraud from the Philippines in Q1 2022, growing 67.2% YoY.

Suspected Digital Fraud Attempts Shift to New Industries

- Fraud Rate Change from Q1 2021 to Q1 2022

Contrary to the TransUnion data, consumers say they are being targeted more by digital fraudsters, according to the recent TransUnion Consumer Pulse Survey. Of the 1,078 Filipino adults surveyed Feb. 8-23, 2022, 53% said they had been targeted by digital fraud in the last three months compared to 50% the previous quarter. Of those consumers that said they had been targeted, they claimed phishing scams were most common (42%) followed by money/gift card scams (38%) and third-party seller scams on legitimate online retail sites (30%).

“While fraud attempts have, in some cases, been deterred by controls that businesses have put in place, fraudsters will not rest and instead, are searching for new vulnerabilities. With more and more Filipinos choosing to transact online even as our economy and society normalize, fraudsters will continue to try to take advantage of any opportunities on the consumer and business fronts. Organizations must take decisive steps and institute measures to stay ahead of any fraud attempts that may arise in the future and build greater trust with the Filipino public,” said Pia Arellano, CEO and president at TransUnion Philippines.

TransUnion came to its conclusions about fraud against businesses based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™. The percent or rate of suspected digital fraud attempts are those that TruValidate customers either denied or reviewed due to fraudulent indicators compared to all transactions that were assessed for fraud.

For worldwide and regional breakdowns around how much the suspected digital fraud attempt rate recently changed, what types of fraud are most prevalent in certain industries and more, download this infographic.
 

Shipping fraud – defined as when a buyer spoofs a shipping address or when a seller receives payment for goods or services, but never ships to the buyer – has quickly emerged as one of the top fraud types across a variety of industries. This issue, however, was most prominent in the logistics industry where consumers purchase goods online and are then reliant on third-party carriers for transportation and delivery of items.

“As consumers shifted from brick-and-mortar retailers to e-commerce platforms over the course of the pandemic, fraudsters gravitated toward where consumers were increasingly spending both time and money,” said Shai Cohen, senior vice president and global head of fraud solutions at TransUnion. “Online shopping has become the ‘new normal’ on a global scale and as a result, the propensity for shipping fraud has also increased.”

As consumer adoption of digital channels has continued to accelerate, the global rate for all types of suspected digital fraud attempts increased 9.4% YoY from 2020 to 2021 and 52.2% from 2019 to 2021. In addition to shipping fraud, other types of fraud that experienced large increases when comparing 2020 to 2021 include business identity theft (+113.8%) and identity mining / phishing attempts (+104.8%) which both showed high rates of annual growth. According to TransUnion’s recent survey of 12,500 adults worldwide, 62% of consumers reported identity theft as their greatest concern when it comes to digital fraud.

Common Fraud Types Increased Across Industries from 2020 to 2021

“Nearly half of all consumers worldwide surveyed by TransUnion said they are conducting the majority of their transactions online, covering everything from managing personal finances and shopping to conducting business matters, which has led to an elevated consumer expectation in terms of both experience and security. To effectively mitigate digital fraud risks, businesses should ensure there are strong authentication processes in place as well as streamlined technology and multi-layered identity solutions. These solutions will help build trust with customers and thwart these fraud tactics,” said Cohen.

Download the 2022 Global Digital Fraud Trends Report to learn more. Specific country and regional data in the report include the United States, Brazil, Canada, Chile, Colombia, the Dominican Republic, Hong Kong, India, Kenya, Mexico, the Philippines, Puerto Rico, South Africa, Spain and the United Kingdom.

Top Industries Targeted by Suspected Digital Fraud in the Philippines

While shipping fraud spans a plethora of industries, certain business sectors tend to be more prone to digital fraud attempts. For transactions originating from the Philippines, the travel and leisure industry saw the largest percentage of annual fraud growth in 2021, with an increase of 69.1% YoY. Communities (including online dating, forums, etc.) (18.2%) and gaming (11.6%) were the second and third industries with the largest growth in the rate of suspected digital fraud attempts.

Globally, financial services, and travel and leisure ranked as the top two industries with the largest growth in the rate of suspected digital fraud attempts during the same time period. This became especially prevalent as economies normalized from the height of the pandemic and tourism resumed. Digital fraud in the travel and leisure sector saw the greatest YoY increase and grew 68.4% with credit card fraud as the predominant type – which is where a customer uses a fake or stolen credit card for a purchase, resulting in a chargeback to the site.

Year-over-Year Growth Rates of Digital Fraud Attempts (2020 – 2021)

Digital fraud in financial services remains a prime target for fraudulent activity worldwide and grew 33.5% YoY, making it an increasing area of concern for businesses and consumers alike. The number one fraud type in financial services is true identity fraud – where the victim is a real person, and a fraudster uses a stolen identity to commit fraudulent transactions. As such, many financial institutions have taken steps to put greater security measures and authentication solutions in place, especially since digital banking is regarded as the industry standard.

“While advances in digital banking and e-wallet services in the country have enabled more Filipinos to formally participate in the financial system, our findings point out that fraudsters have shadowed the shifts in consumer behavior in attempts to take advantage of the disruption,” said Pia Arellano, president and CEO of TransUnion Philippines.

“As consumers value both a seamless user experience as well as security, it is imperative that businesses view fraud solutions not only as defensive measures, but also as instruments in aiding customer acquisition and retention. This approach helps improve the onboarding experience and facilitates a bedrock of trust between businesses and consumers,” she added.

TransUnion came to its conclusions about fraud against businesses based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™. The percent or rate of suspected digital fraud attempts are those that TruValidate customers either denied or reviewed due to fraudulent indicators compared to all transactions it assessed for fraud.

For more information and insights on global fraud trends, please download the report.

TransUnion surveyed 1,078 adults in the Philippines to measure changing consumer attitudes and behavior based on the dynamics of income, debt and identity theft. The company conducted the study from Feb. 8-23, 2022 with respondents from Gen Z (born 1995-2004), Millennials (born 1980-1994), Gen X (born 1965-1979), and Baby Boomers (born 1944-1964).

With 75% of those surveyed anticipating their household income will increase this year, the survey results reflect the lessons Filipinos learned following the COVID-19 pandemic. In particular, 51% of respondents said in the last three months they saved more in an emergency fund, 45% cut back on expenses for dining out, travel, and entertainment, and 28% added to or expanded digital services like wireless and internet. Over the next three months, consumers expect their spending on the following to increase: medical care/services (44%), retail shopping (37%), and retirement funds and investing (35%).

Credit is an important way to empower consumers and encourage them to participate actively in the economic recovery. In the next 12 months, most Filipinos (51%) expect that they will be able to pay at least one of their current bills and loans in full. However, the other 49% from the past quarter expect that they are unable to pay at least one of their current bills and loans in full, as there’s been no significant change in the ability to meet financial obligations. Lastly, 52% plan to apply for new personal loans. However, half of those surveyed (50%) abandoned plans to apply for new credit or refinance – with the top reasons being the high cost of new credit or refinancing (32%) or they found an alternative funding source (32%). So, though there is appetite for new credit applications, reforms need to be made to make follow-through a reality for more people.

Credit Perception

Among consumers surveyed, it is apparent that all generations believe that it is important to have access to credit and lending products to achieve their financial goals. However, it is the younger Filipinos, Gen Z, who view credit as an essential part of their everyday lives. This is proven by the fact that from nearly half of the respondents who are planning to apply for credit in the next year (46%), half of them are younger generation Filipinos (50%), the Gen Z. Meanwhile, more than half (57%) of those with a credit score between 750 and 789 (considered a ‘very good’ score) said that they plan to apply for new credit.

Online Activities

Reflecting how the pandemic accelerated consumers going online, the survey found 57% of Filipinos said they conduct more than a quarter of their transactions online.

With so many transactions occurring online, fraudsters appear to have taken notice. Forty-five percent of respondents said they had been targeted by a digital fraud scheme in the last three months. Among those targeted, the most common digital fraud schemes that respondents said they encountered were: phishing (42%), money/gift card (38%), third-party seller scams on legitimate online retail websites (30%), fundraising (25%), identity theft (23%) and having their account taken over (22%).

While nearly half of all Filipinos said they believe their credit score would increase if businesses used information not on a standard credit report—e.g., rental payments and buy now, pay later loans—86% expressed considerable concerns about sharing personal information. The top reasons for this involve invasion of privacy (76%) and fear of identity theft (73%).

"From optimism about improved household incomes to anticipated increased spending in key areas, Filipinos are increasingly bullish about our recovery from the global pandemic," TransUnion Philippines president and chief executive officer Pia Arellano said.

"By conducting this study quarterly and making the results public, TransUnion Philippines harnesses information and insights to provide a comprehensive understanding of the changing attitudes and situation in the country. This can help better inform consumers, businesses, policy makers and other stakeholder decisions as the Philippines moves toward economic growth."

To discover more insights surrounding Filipino financial behavior, the latest TransUnion Consumer Pulse Study can be found here.

The TransUnion Philippines Consumer Pulse Study surveyed 1,089 adults in the Philippines to discover findings on the financial impact of COVID-19 on consumers. The study was conducted from Nov. 1-8, 2021, with respondents ranging from different Philippine resident demographics from Gen Z (born 1995-2003), Millennials (born 1980-1994), Gen X (born 1965-1979), and Baby Boomers (born 1944-1964).

“From financial health to the disruptions in daily living, the lives of millions of Filipinos have drastically changed and continue to change due to COVID-19,” said Pia Arellano, President and CEO of TransUnion Philippines. “As an ongoing study, TransUnion Philippines continuously strives to develop a comprehensive understanding of the financial impacts of the pandemic as well as to harness the information to better inform consumers, businesses and other stakeholder decisions as the pandemic continues to impact our daily lives,” Arellano added. 

The impact of COVID-19 on household income and bill payments

Close to half (46%; decreased by 8 percentage points from Q3 2021) of respondents surveyed believe their household income (HHI) will decrease in the future due to COVID-19. There is a belief that vaccinations are a possible contributing factor to a growing optimistic economic outlook. Among the 64% of the population who said they had been fully vaccinated, 13% reported never having their HHI decrease due to COVID-19, and they expect less negative impact in the future (44% compared to 50% of those who do not plan on getting vaccinated).

However, about half (46%) of all households expect to be unable to pay their current bills and loans in full. Among payment methods, the most popular ways used to pay current bills and loans are savings (42%) and partial payments (45%). Personal loans (37%), mortgages and home loans (33%), and credit cards (27%) emerged as the top bills and loans consumers who have these bills and loans say they will not be able to pay.

Adjusting attitudes and plans for economic participation

This cautionary attitude towards spending has carried over into Q4 beyond the 52% of those surveyed saying they had cut back on discretionary spending, with 47% of respondents saying they had saved more in an emergency fund in the last three months. In terms of purchasing behavior, e-commerce looks like it may continue its momentum into the New Year with 47% of respondents saying they’ll increase their number of online transactions in the next three months.

There appears to be a large gap in those wanting to access credit compared to receiving it, with 52% saying they believe it’s important to have access to credit and lending products to achieve financial goals but only 35% said they had sufficient access to credit and lending products. At 51%, millennials were the generation who said they plan to apply for credit the most in the next year. In terms of credit monitoring, 93% of respondents believed in the importance of monitoring credit; with 69% of respondents doing so at least once a month.

A focus on fraud

Digital fraud continues to be a significant worry, especially around the holidays, with 95% of consumers saying they were concerned about being victimized by digital fraud during the 2021 holiday season. Half of the respondents surveyed said they had been targets of digital fraud attempts in the last three months. Across generations, Millennials and Gen X were the most targeted at 54% and 52% respectively.

Overall, phishing (44%) and third-party seller scams on legitimate online retail sites (39%) were the two most common tactics reported for digital fraud schemes among consumers who said they had been targeted. Those findings were consistent across the demographics surveyed.

To discover more insights surrounding the financial impact of COVID-19 on Filipino financial behavior, the latest TransUnion Consumer Pulse Study can be found here.

The global percentage of suspected fraudulent e-commerce transactions is 3.74% higher than the same five-day period leading up to Cyber Monday last year. For transactions originating from the Philippines, the percentage decreased by 48.79% in the same timeframe. These findings are based on intelligence from billions of transactions and more than 40,000 websites and apps contained within TransUnion’s flagship identity proofing, risk-based authentication, and fraud analytics solution suite — TruValidate™.

The analysis also observed the top two reasons globally for potentially fraudulent e-commerce transactions in the five days leading up to Cyber Monday. The top reason was the number of accounts per device – which triggers when a device has accessed the minimum number of accounts during the set time period. The second was evidence exists – which occurs when an account or device has previously had a fraudulent transaction.

Percentage of Suspected Fraudulent E-Commerce Transactions during Holiday Shopping Weekend

“The holiday shopping season is a popular time globally for bad actors to engage in fraudulent activity, particularly in the e-commerce and retail industry,” said Shai Cohen, senior vice president of global fraud solutions at TransUnion. “Online shopping is the new norm for majority of consumers and that trend has been further accelerated due to the COVID-19 pandemic. Consumers want to shop with online retailers that not only provide a seamless user experience, but also take consumer security and privacy seriously. It is imperative that those businesses equip themselves with the proper tools to detect fraud at the first warning sign without inhabiting the consumer journey.”

In addition to the findings, TransUnion released the following fraud analysis for the Philippines regarding the percentage of suspected fraudulent e-commerce transactions during the start of the holiday shopping season as well as the entire year from 2019 to 2021.

• 2.49% from Nov. 25 – 29, 2021; 3.95% so far in 2021
• 4.86% from Nov. 26 – 30, 2020; 4.63% in 2020
• 7.29% from Nov. 28 – Dec. 2, 2019; 6.07% in 2019

Percentage of Suspected E-Commerce Fraud – Holiday Season vs. Overall

Decline in suspected fraud attempts as consumers express concern

The decline of suspected digital fraud during the traditionally busiest days of the holiday shopping season occurred as consumers expressed concern about being victimized. TransUnion’s Q4 2021 Consumer Pulse Study found that 95% of Filipino consumers are concerned with falling victim to online fraud this holiday season.

“With an exponential rise in digital transactions in the Philippines during pandemic times, concerns related to online fraud continue to be top of mind for businesses and consumers alike. Despite a fall in suspected fraudulent e-commerce attempts from the Philippines during this last year, it is important everyone remains vigilant. As a business, TransUnion works hard to protect Filipinos from global fraud by developing advanced solutions that businesses can implement to combat the evolving online fraud landscape while still allowing legitimate transactions. We understand that ensuring each person can be reliably represented is key to making trust possible between businesses and consumers.” said Pia Arellano, President and CEO of TransUnion Philippines.

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as gambling, gaming, financial services, healthcare, insurance, retail, and travel and leisure, among others. To find out how data varies across select countries, how mobile plays a large part in digital holiday fraud, and what days during the holiday shopping season are most popular for fraud and more, TransUnion’s holiday fraud trends can be found here.

Credit Scores: The Importance of Representing the Credit Invisible

Traditionally, credit scores are values derived from formal credit data that utilize statistical methods to help predict an individual’s capability to pay back a loan. For Filipinos, a good credit score helps enable access to financial opportunities that can lead to a higher quality of life. For financial institutions, the use and availability of a credit score helps potential lenders determine how much to responsibly lend and how much interest a customer will pay to borrow money or secure a loan.

Despite ongoing increases in financial inclusion, over 50 million Filipinos¹ remain unbanked, with 45% of the unbanked population resorting to borrowing money from non-bank sources – mostly family and friends. With these “credit invisible” consumers left with limited to no access to formal credit, lenders are faced with the dilemma of having insufficient visibility into a potential customer’s risk profile – and are forced to reject the majority of them due to a lack of insight.

CreditVision Link adds another layer of assessment by utilizing alternative data sources like telco (mobile phone) data, including reloads, payments, mobile data usage, and device data. With this technology, lenders can expand their reach by accurately scoring even consumers with little to no formal credit data. This enables faster and easier processing of applications, helping to optimize acquisition strategies by gaining a more holistic view of new-to-credit (NTC) consumers.

“TransUnion’s commitment to financial inclusion in the Philippines is central to everything we do. We are focused on providing financial institutions with solutions that will enable them to support even more Filipino consumers. Through access to rich insights, lenders can increase acquisition volumes and better protect against fraud, all within their own defined risk appetites,” said Pia Arellano, President and CEO of TransUnion Philippines.

“CreditVision Link is the result of our continuously expanding database which includes alternative scoring partners and traditional credit bureau data to accurately represent even unbanked Filipinos, who comprise a majority of the population. This solution benefits consumers and businesses alike and has the potential to build greater economic momentum in our country,” she added.

Information for Greater Financial Inclusion

For consumers, access to financial services is often essential when looking to achieve their goals and access new opportunities – regardless of their current standing. However, for unbanked consumers, more novel and comprehensive approaches to credit scoring and risk assessment are needed to help them access formal, higher quality and more inclusive financial services.

“When lenders are able to offer consumers with a limited or no formal credit history a line of credit, it creates an opportunity to build lifetime loyalty. To do so, access to the best information and insights is critical,” said Ela Reyes, Solutions Group Head for TransUnion Philippines.

“The topic of financial inclusion has never been more important. As the Philippines looks to recover from COVID-19, economic growth will, in part, be fueled by peoples’ access to credit. We’re focused on creating and introducing new more powerful tools for financial inclusion. Access to new and expanded insights is a determining factor in the extent to which different segments of the population can participate in the formal financial system. CreditVision Link, with its depth and breadth of traditional and alternative data, allows businesses to facilitate smoother transactions, and allow more consumers access to the financial services they need,” she added.

 ¹Bangko Sentral ng Pilipinas 2019 Financial Inclusion Survey

Filipinos’ perceived access to credit—or lack thereof—may also have something to do with the high awareness and use of BNPL services. Over half (55%) of respondents in TransUnion’s latest Consumer Pulse study believed access to credit is important to achieve their financial goals, but only just over a third (36% - an increase of three percentage points from Q2 2021) said they have sufficient access to credit and lending products. Despite this, nearly half (46%) of respondents said they plan to apply for new or refinance existing credit in the next year.

Financial institutions extending BNPL as an alternative form of lending should pay particular attention to Millennials and Gen Z (born 1995–2003). The survey revealed that among those who have used BNPL services in the past 12 months, they are the generations most curious with 40% and 38%, respectively, saying they used BNPL because they “just wanted to try it”. Meanwhile, Gen X was the generation most likely to make larger purchases with the service at 34%. Baby Boomers (born 1944–1964) was the generation who most said they used BNPL in order to spread payments over time (60%). More than 30% of each generation surveyed said they used Buy Now Pay Later services because it was easy to apply for it.

“The growing popularity of Buy Now Pay Later coincides with the convenience, availability, and smooth transactions that consumers have come to expect from digital services. Lenders looking to implement campaigns in this evolving and growing area must be able to establish an underwriting system that can identify good customers in order to sustain that reasonable balance between risk and opportunity, and great customer experiences,” said Pia Arellano, TransUnion Philippines president and CEO.

Bills and loans consumers are unable to pay

In the latest round of the TransUnion Consumer Pulse study, the percentage of Filipino consumers reporting their household income was currently decreased reached 64% in Q3 2021. While many hoped a faster COVID-19 vaccine rollout would drive economic recovery, the majority (54%) of consumers believed their household income will be negatively impacted by the pandemic in the future.

About half of all surveyed consumers (48%) were concerned about paying their bills or loans in full. The top bills and loans consumers said they won’t be able to pay among those with these bills/loans were auto lease (36%), personal loan (35%), and auto loan (35%). Meanwhile, 21% of consumers said they received a financial accommodation, such as a deferral, forbearance, payment holiday or eviction prevention in the past year. Mortgage (20%), private student loan (19%), auto loan (16%), and personal loan (16%) were the top bills and loans enrolled in financial accommodation in the past year among consumers with that bill/loan.

In order to pay current bills or loans, 47% said they’ll use money from savings and 40% will borrow money from friends/family, while 41% said they’ll pay a partial amount. Over one in 20 consumers (6%) reported they don’t know how they’re going to pay.

“With BNPL gaining traction, we are seeing a growing opportunity for financial services providers and even marketers to support consumers during this difficult time. In more mature global credit markets, retailers have even been extending BNPL to products or services beyond the usual consumer goods, such as vet care. There is a huge growth potential for BNPL, and TransUnion is focused on helping lenders accommodate evolving consumer needs by helping inform risk decisions so that the economic viability of BNPL lending can be sustained. Lenders that use advanced information and insights and digital onboarding technology can grow market share, while also safeguarding themselves and consumers from fraud. Done right, consumer lending has the ability to stimulate economic activity and benefit the nation as a whole,” said Arellano.

Fighting fraud schemes targeting consumers

TransUnion has constantly warned about the prevalence of fraud in the digital space. Fraudsters didn’t fail to notice the exponential increase in online transactions in the past year and have been trying to capitalize on trends as they emerge.

In the latest Consumer Pulse study, almost half (48%) of Philippine respondents said they have been targeted by a digital fraud attempt in the last three months. Among those targeted, phishing (44%) and third-party seller scams on legitimate online retail websites (43%) were the two most common tactics employed by fraudsters online.

“Technology has afforded us with solutions that cater to the ever-evolving market needs and consumer demands. Many BNPL companies now utilize real-time decisioning, but all financial institutions must keep in mind that their risk management strategies should always include multi-layered defenses against fraud while maintaining friction-right customer experiences. At TransUnion, we’ve found that harnessing device intelligence, in addition to our own bureau data and alternative data from our partners, expose fraud and fraud linkages that can’t be detected by simple face or ID scans alone. We are committed to continuously innovating to provide our members with the tools they need to grow their business and protect them and the consumers they serve from fraud,” said Arellano.

*TransUnion’s global Consumer Pulse study quantifies the ongoing financial impact of COVID-19. This online survey of 1,100 adults in the Philippines was conducted Aug. 11–17, 2021 by TransUnion in

partnership with third-party research provider, Qualtrics® Research-Services. For previous Consumer Pulse Studies, visit our Consumer Pulse study page.

The industries with the largest declines in suspected digital fraud originating from the Philippines during that timeframe were telecommunications (-98.7%), logistics (-71.1%), and financial services (-61.3%). These industries have been the most impacted in previous periods, illustrating how fraudsters shift their focus every few months, following the money where it is most profitable.

The sudden shift in focus of fraudsters is apparent in financial services. Global financial services online fraud attempt rates had risen 149% when comparing the first four months of 2021 and the last four months of 2020. But when comparing Q2 2021 and Q2 2020, the rate of suspected online financial services fraud attempts has still risen, but at a much lower rate of 18.8% globally.

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as gambling, gaming, financial services, retail, and travel and leisure, among others. The conclusions are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™.

“Among all the markets that our research covered, the Philippines recorded the second biggest decline in the rate of suspected digital fraud originating from that country, next only to Brazil. It is possible fraudsters have recognized the fraud controls our customers have after experiencing them first-hand and have gone elsewhere for the time being. However, constant vigilance is still warranted as we’ll likely see them again in industries where transactions are increasing,” said Pia Arellano, president and CEO at TransUnion Philippines.

Fraudsters are re-focusing their efforts

There’s simply no time for complacency as certain sectors still observe an uplift in attacks. Gaming, and travel and leisure were the two most impacted industries globally for the suspected digital fraud attempt rate, rising 393.0% and 155.9% when comparing Q2 2021 to Q2 2020, respectively. In the Philippines, this rate rose 51.4% for gaming and 198.5% for travel and leisure during those same timeframes.

Industry Year-over-Year Suspected Digital Fraud Attempt Rate

Increases and Declines in Q2 2021 Coming from the Philippines

In the travel and leisure industry, the top type of fraud globally is credit card fraud. This happens when a customer uses a fake or stolen credit card for a purchase, resulting in a chargeback to the site. In communities, profile misrepresentation is the top fraud type, wherein a user posts inaccurate information in their profile and/or uses bogus profile photos. Meanwhile, the global gaming industry is plagued by gold farming, a practice wherein a user sells in-game assets/currency for real-world cash – an act that violates game rules.

More than one-third of consumers continue to be targeted by COVID-19-related digital fraud

As online fraud attempts against businesses continue to escalate, one in three consumers stated that they have been targeted by a digital fraud scheme related to COVID-19 during the second quarter of 2021. TransUnion’s Consumer Pulse study[2] in June 2021 found that approximately 36% of global survey respondents said they were targeted by fraudsters in COVID-19-related digital schemes. Almost half (48%) of Philippine respondents said they were targeted.

Phishing is the No. 1 type of COVID-19-related digital fraud impacting global consumers in Q2 2021. Among global consumers who say they were targeted with COVID-19-related digital fraud, 33% state they have been targeted by or fallen victim to such fraud. Stolen credit card or fraudulent charges was the second most cited type of COVID-19-related online fraud among those targeted, affecting global consumers at 24%. Phishing was also No. 1 in the Philippines at 40% followed by third-party seller scams on legitimate online retail websites at 29%.

“One in three people globally have been targeted by or fallen victim to digital fraud during the pandemic, placing even more pressure on businesses to ensure their customers are confident in transacting with them,” said Arellano. “As fraudsters continue to target consumers, it’s incumbent on businesses to do all that they can to ensure their customers have an appropriate level of security to trust their transaction is safe all while having a friction-right experience to avoid shopping cart abandonment.”

More information about TransUnion’s quarterly digital fraud analysis can be found here.

TransUnion’s Consumer Pulse study findings showed the outlook is still uncertain, with 54% of respondents expecting their household income to be impacted in the future – an increase of five percentage points from the previous quarter. The majority of consumers (85%) continued to be concerned about being able to pay their bills and loans, with nearly half (49%) anticipating they’ll be unable to pay at least one of their current bills and loans in full.

Among those who expect they’ll be unable to pay bills/loans, middle generations plan to use money from savings (47% of Millennials and 42% of Gen Xers), refinance/renegotiate payments/rates (10% of Millennials and 12% of Gen Xers), and take out a personal loan (both at 14%) – more than other generations would. Among Gen Z (born 1995–2003), for instance, 40% plan to use money from savings, 8% plan to refinance/renegotiate payments/rates, and 12% said they will take out a personal loan.

Middle generations also reported having saved more in emergency funds (50% of Millennials and 48% of Gen Xers, versus 40% of Gen Z) and paid down debt faster (24% of Millennials and 19% of Gen Xers, versus 15% of Gen Z). However, they still have greater credit needs – 52% of Gen Xers and 50% of Millennials said they plan to apply for new credit or refinance existing credit within the next year, compared to only 44% of Gen Z. Specifically, Philippine consumers plan to apply for new personal loans (23%), credit cards (16%), and mortgages (16%).

“The second quarter started with stricter quarantine restrictions anew as the Philippines faced a surge in COVID-19 infections. The economic consequences of the pandemic remain prevalent across many aspects of our study data, and in some cases, we are seeing worsening results – from consumers’ inability to pay bills and loans to being targeted and falling victim to fraud schemes,” said Pia Arellano, TransUnion Philippines president and CEO. “Despite this, many respondents are still hopeful that their finances will recover which is a good sign of their economic outlook. Our results show the provision and availability of credit is a big feature for Filipino finances and consumers’ ability to balance household finances in the coming months. Lenders need to make informed decisions so they can extend consumers the products best suited to their individual needs and circumstances, and help build a sustainable recovery whilst also managing risk effectively.”

Consumers optimistic about their financial future

Among all the respondents, 74% expressed positive feelings about their financial outlook, with 61% classifying their financial situation as hopeful – where their household income has decreased, but they think their finances will recover. On the other hand, 8% said their financial situation was either stable or thriving – where their household income has not decreased and their finances in 2021 are as planned or better. Meanwhile, 5% said they were resilient as their household income has decreased during the pandemic (currently or in the past) but their finances have fully recovered.

Philippine consumers indicated they plan to increase or at least retain their household spending over the next three months. Seventy-two percent said they will increase or at least retain their spending on digital services and 61% on retail (clothing, electronics, etc.). However, everyday living priorities are still in order as 77% said they will also increase or at least retain spending on medical care/services, 74% on bills and loans, and 62% on retirement funds/investing.

To further understand the financial impact of COVID-19, the Consumer Pulse study also includes a section on financial inclusion. It found that 86% of respondents (a drop of four percentage points from previous quarter) believe access to credit is at least moderately important to achieve their financial goals. However, only 32% (a drop of two percentage points) said they have sufficient access to credit. The older the respondents are, the more they felt they have enough access to credit and lending programs: 42% of Baby Boomers (born 1944–1964) share that belief, whereas only 31% of Gen Z say they do. Despite this, 77% of all respondents believe that monitoring credit is very or extremely important. More than two-thirds (68%) also monitor their credit at least monthly.

Significant increase in digital fraud activity

Of Philippine respondents, 57% expect their number of online transactions to increase over the next three months. However, alongside increased online activity levels, fraudsters keep taking advantage. During the pandemic, there was an increase in fraud activity, with digital fraud attempts from the Philippines increasing 19% when comparing the first four months of 2021 with the last four months of 2020, as reported in TransUnion’s most recent global fraud study.

In the Consumer Pulse study, meanwhile, 42% (an increase of three percentage points) said they have been targeted by a fraud scheme but did not become a victim of it. Unfortunately, 6% (an increase of two percentage points) acted on a fraud scheme and became a victim.

Phishing (40% of those targeted) and third-party seller scams on legitimate retail websites (29%) remain the most common COVID-19-related digital fraud schemes encountered by consumers in the Philippines, with shipping fraud (24%) coming in close at third.

“We’ve seen in the both the digital fraud attempts monitored by TransUnion’s fraud analytics solutions and the responses of consumers on ground that fraud remains a persistent global problem. As we continuously work to regain our economic progress, it is crucial that businesses, consumers, and the government approach recovery holistically. This entails creating programs and actions in response to insights similar to those we’ve shared, while at the same time maximizing the available digital solutions that can help fast-track results and accelerate growth in areas that it is needed most,” Arellano said.

*TransUnion’s global Consumer Pulse study highlights the ongoing financial impact of COVID-19. The most recent survey includes responses from 1,100 consumers in the Philippines and was conducted online between June 1 and June 16, 2021. For previous Consumer Pulse Studies, visit our Consumer Pulse study page.

1CISP offers support to mostly underprivileged communities by providing their cooperatives with life and non-life insurance products and wider financial services. Its tech partner—TraXion Tech—is a systems integration company that specializes in transaction management systems. Together, the two organizations launched and operate the DigiCoop website where cooperative members can apply for loans, insurance, and investments, pay bills and other financial commitments, and access the DigiCoop virtual marketplace, among other capabilities. The website provides a convenient online platform that supports financial inclusion in rural areas.

Under the partnership, TransUnion will provide 1CISP and its member-cooperatives a reliable credit scoring and reporting system integrated and ready to use within the DigiCoop platform. This finally gives cooperatives visibility on their members’ off-books credit behavior, enabling them to assess the creditworthiness of their existing borrowers and new applicants more efficiently and effectively and at a reduced cost. It will help cooperatives better manage their portfolio and lend with greater confidence, empowering them to be more competitive and allowing them to grant more and bigger access to credit to their community.

There are approximately 3,000 cooperatives serving members such as farmers, government employees, and teachers nationwide that will benefit from the partnership. Through TransUnion’s solutions, 1CISP member-cooperatives will be able to offer them more tailored products and services that are reflective of the member’s individual finances whilst offering a faster and more convenient loan application process.

“Technology plays a huge role in terms of providing services, and DigiCoop and our other initiatives have played an important part already during the pandemic. With the addition of TransUnion’s solutions, we can extend our reach and fulfill our responsibility of providing protection and risk mitigation to the communities and members we serve,” said 1CISP President Roy Miclat. “Grassroots finance has been performing well during COVID-19 and we want to reinforce this position. Our partnership with TransUnion enables us to further enhance cooperative lending capabilities. With better insights, they won’t have to manually process every loan that comes, accelerating their decision-making when extending credit services.”

Mainly catering to rural areas, cooperatives are crucial in sustaining the livelihoods of communities and empowering marginalized members by providing opportunities for economic and human capital development. During the pandemic, most cooperatives under 1CISP grew 8-10% in membership as many consumers were pushed to seek financial support in coping with the economic impact of COVID-19 on their communities and household finances. To address the sudden surge of members, 1CISP and TraXion Tech launched the DigiCoop platform to be able to reach and onboard cooperative members despite the social distancing protocols and continuously provide them access to credit and digital financial services during these difficult times.

“As a tech provider, one of the biggest pain points in serving the communities is the lack of infrastructure. Alongside 1CISP and TransUnion, we enable cooperatives to virtually roll out services that they were only able to provide traditionally. By integrating TransUnion’s services into the DigiCoop platform, cooperatives now have access to better insights and intelligence that will help them mitigate and weigh the risks that go along with providing their members the loan that they require. At the same time, members are able to boost their capability and expand their access to the different financial services provided by the cooperatives,” said Ann Cuisia, TraXion Tech CEO.

As part of the data-sharing agreement, 1CISP will also contribute its cooperative data to TransUnion’s database and strengthen the insights it is able to provide. In the end, it will become a true bayanihan effort that empowers all stakeholders to work towards achieving countryside development and nation-building goals.

“This partnership is a great milestone because it enables us to reach more underserved consumers and be instrumental in giving them access to the financial services they need. We’re proud to work with organizations like 1CISP and TraXion Tech that share our vision of improving financial inclusion to ensure that no Filipino gets left behind. This is only the beginning. It will be an ever-evolving process as we onboard more cooperatives into TransUnion and customize our solutions to tackle their specific needs,” said TransUnion Philippines President and CEO Pia Arellano.

Across industries, the rate of suspected digital fraud attempts globally rose 24% when comparing the first four months of 2021 with the last four months of 2020. The percentage of digital fraud attempts coming from the Philippines increased 19% during the same time period.

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as communities, financial services, gambling, gaming, retail, and telecommunications, among others. The conclusions are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™.

“The rate of fraud attempts was up globally and especially in the financial services industry because fraudsters understand this is where the most high-value transactions are taking place. While this industry is traditionally known for in-person transactions, fraudsters have recognized its rapid digital acceleration and are trying to capitalize,” said TransUnion Philippines President and CEO Pia Arellano. “We are seeing more financial services organizations implement fraud prevention solutions with some success, though our findings make it clear that this is not the time to relax. As the economy begins to open up and perform better, businesses need to do even more to ensure they are providing a secure marketplace that offers friction-right experiences to consumers.”

Examining Fraud Types and Their Impact on Industries

TransUnion analyzed industries with the highest increases and declines in the percent of suspected digital fraud attempts against them, comparing the periods of Sept. 1-Dec. 31, 2020 and Jan. 1-May 1, 2021.

Top Suspected Digital Fraud Rate Attempt Increases and Declines by Industry

Interestingly, the telecommunications and logistics industries recorded the two largest declines during this period. TransUnion’s March 2021 assessment, which analyzed the pre- and post-pandemic declaration periods (March 11, 2019-March 10, 2020 and March 11, 2020-March 10, 2021), found the opposite with telecommunications and logistics having the two largest suspected digital fraud rate increases between the periods respectively. Financial services had the third highest increase in the rate of suspected digital fraud during the March analysis, and jumped to the top spot this time.

TransUnion defines true identity theft, the top type of digital fraud in financial services, as the consumer using a stolen identity (from a victim who is a real person) to commit fraud. The second and third type of digital fraud most reported by TransUnion financial services customers are first-party application fraud and account takeover, respectively.

First-party application fraud is when a consumer refuses to repay legitimately incurred debts and/or falsely claims to be a victim of identity fraud to evade debt. Account takeover is when someone other than the owner of an account uses the account without permission, indicating that the account has been maliciously compromised.

“An interesting dynamic is playing out where we are seeing other industries facing far fewer suspected fraud attempts than what has been observed in financial services. In some cases, as in logistics and retail, we are seeing a decline in the rate of such fraud attempts,” said Arellano. “The key takeaway for businesses is that fraudsters do not treat every industry equally. They often pick and choose an industry to focus on based on the time of year or what businesses are seeing more transactional activity. For example, in the Philippines, the rate of suspected digital fraud attempts originating from it against online communities like dating sites and forums increased by 10% whereas the global average decreased 4%. At times, fraud attempts are conducted at random simply to determine if businesses are prepared to meet their challenges. In this critical time, it pays to be one step ahead.”

More information about TransUnion’s insights and solutions can be found here.

¹The percent or rate of suspected or risky fraudulent digital transaction attempts are those that TransUnion’s customers either denied or reviewed due to fraudulent indicators compared to all transactions it assessed for fraud

TransUnion initiated its Consumer Pulse study, a survey of adults in the Philippines and abroad, to better understand the financial impact of COVID-19 on consumers. The initial Philippine survey (conducted from March 5–22, 2021) of 865 adults marked the first by TransUnion in the country and is part of what is planned to be a series of ongoing research.

“Whether it’s their financial health, financial wellbeing, or changes in day-to-day living, the lives of millions of people in the Philippines and abroad have changed dramatically because of COVID-19. The Philippines, like many other countries, has had extended periods under lockdown, and we continue to manage the ongoing impact as the number of cases remains high. The aim of our regular Consumer Pulse research is to better understand the financial impacts of the pandemic and better inform consumers, businesses, and government decisions during these unprecedented times,” said Pia Arellano, TransUnion Philippines president and CEO.

Among the respondents whose household income is currently negatively impacted, 45% said they or someone in their household had lost their job, 42% said they or someone in their household had had their work hours reduced and 24% said someone in their household owned a small business that closed or had orders that dried up. As a result, it has become even more challenging to manage household budgets.

Of those whose income is currently negatively impacted, 88% said they are concerned about their ability to pay their current bills and loans in full, with 48% reporting they will not be able to pay their bills in less than four weeks. Among those whose household income is currently decreased and has these bills and loans, 47% said they would be unable to pay their mortgage, 41% auto lease, 36% house/rental insurance and 35% credit card.

In addition, consumers whose household income is currently negatively impacted have made changes in their approach to savings or debts. Almost half (47%) reported they had cut back on discretionary spending, while 31% cancelled/reduced digital services, among other budget changes. Meanwhile, 48% said they had saved more in emergency funds; 26% had paid down their debt faster; and 19% had saved more for retirement.

TransUnion’s research also found that fraudsters are adding to the pressure, taking advantage of consumers’ move to the digital space in the conduct of their lives during the pandemic. Forty-four percent of respondents claim they have recently been targeted by digital fraud related to COVID-19, with 4% having acted on a fraud scheme and are now a victim. Gen X respondents (born 1965–1979) have been most susceptible to falling for digital fraud related to COVID-19 with 9% of this generation indicating they had acted on attempts and become a victim. The top pandemic-themed digital scam for those targeted with COVID-19-related digital fraud is phishing at 40%, followed by third-party seller scams on legitimate retail websites at 31%.

Recovery Plans

In response to the financial challenges posed by COVID-19, Filipino consumers surveyed cited several ways they plan to address their obligations. Forty-nine percent of those who reported their household income currently negatively impacted said they planned to use their savings to pay current bills, and 44% said they would borrow money from a friend or family member. Meanwhile, 45% said they would pay a partial amount, and 17% plan to take out a personal loan to pay their current bills or loans. For context, nearly one-third (31%) of Filipinos are in the medium risk credit range (those who say their credit score is 750–789 – i.e. EE-FF)*, and nearly a third (31%) do not know their credit score.

Among all survey respondents, more than a quarter (28%) said they have received a financial accommodation such as deferral, forbearance, payment holiday or eviction prevention in the past year. Among those with these bills, 21% have gotten an accommodation for life insurance or a personal loan, and 18% for either an auto lease, credit card bills or medical bills (all at 18%).

On a positive note, only 6% of those with accommodation said they weren’t prepared at all for when their financial accommodation period ends, with almost half (49%) saying they were very well or completely prepared.

Some respondents did acknowledge expected changes in household spending over the next three months, with 48% of all respondents saying they planned on decreasing discretionary personal spending e.g., eating out, travel, entertainment; 45% will decrease large purchases e.g., appliances, cars; and 43% will increase spending on bills and loans e.g., housing, utilities, insurance, credit cards.

“Financial hardship due to the pandemic is broadly felt across all markets that TransUnion surveyed. At this time of prolonged uncertainty, it is important that there is a dialogue between credit institutions and their customers. To help consumers, lenders are now incorporating alternative and trended data into their lending strategies. Leveraging such information can result in more informed decisions and trustworthy relationships between consumers and lenders, which is especially important as uncertainty has reigned over the credit landscape during much of last year,” Arellano concluded.

More information about TransUnion’s global Consumer Pulse studies is available here.

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*TransUnion Philippines score card risk grade definitions are: AA-BB 830-900; CC-DD 790-829; EE-FF 750-789; GG-HH 700-749; II-JJ: 300-699

TransUnion came to its conclusions about fraud against businesses based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™.

It found the percent of suspected fraudulent digital transaction attempts¹ originated from the Philippines increased 31% when comparing the following two periods: Period #1 (March 11, 2019 and March 10, 2020); Period #2 (March 11, 2020 – when the World Health Organization declared COVID-19 a global pandemic – and March 10, 2021).

“Fraudsters are always looking to take advantage of significant world events. The COVID-19 pandemic and its corresponding rapid digital acceleration brought about by stay-at-home orders is a global event unrivaled in the online age,” said Pia Arellano, TransUnion Philippines president and CEO. “By analyzing billions of transactions we screened for fraud indicators over the past year, it has become clear that the war against the virus has also brought about a war against digital fraud.”

In the Philippines across industries, TransUnion found the cities with the highest percent of suspected fraudulent transactions were: 1) Salcedo, Eastern Samar 2) Makati City and 3) Manila.

Consumers Targeted By COVID-19 Schemes

The provisional results of TransUnion’s Global Consumer Pulse Study found that 44% of Philippine consumers said they had been targeted by digital fraud related to COVID-19 in the last three months. The full results of the TransUnion Philippines Consumer Pulse Survey are set to be released this April.

Gen Z (born 1995–2002) is currently the most targeted out of any generation at 48%. They are followed by Millennials (born 1980-1994)at 42%.

Among consumers in the Philippines reporting being targeted with digital COVID-19 schemes, the top pandemic-themed scam is phishing with 40% saying they were targeted with it.

Examining Fraud Types and Their Impact on Industries

TransUnion analyzed the below industries for a change in the percent of suspected digital fraud attempts against them, comparing the periods of March 11, 2019-March 10, 2020 and March 11, 2020-March 10, 2021.

Suspected Digital Fraud Attempt Rate Post-Pandemic Declaration

Results showed a significant increase in attempted fraud from the Philippines against telecommunication companies. With more than a ten-fold increase (1,108%) this has been a significant development during COVID-19 times. Although credit card fraud isn’t unusual for any retailer, fraudsters are now looking for ways to monetize their efforts and are using fraudulent credit cards to purchase high end phones and then sell them on the black market.

Separately, through the TruValidate solution, TransUnion documented a 19% growth in transactions among its global iGaming customers during 2020, and recently researched its fraud impact in a special report. It determined that its online gambling customers experienced a 9% increase from 2019 in the rate of suspected fraud among the 576 million iGaming transactions TransUnion analyzed for risk indicators last year when compared to 2019.

Despite it being one of the hottest-growing industries, TransUnion observed a decrease in the iGaming mobile transaction rate for the first time since at least 2016. However, iGaming on mobile devices is still much higher than desktops with the percent of online gambling transactions coming from mobile devices at 69%.

“We believe mobile online gambling transactions dipped because so many people used their desktops while working from home due to the pandemic. However, we expect the long-term impact of mobile to continue to be paramount for business success,” said Arellano. “Mobile devices will be key to providing a seamless way for online gamblers to transact and businesses to assess risk with biometric-driven multifactor authentication.”

TransUnion’s Global Fraud Solutions unite both consumer and device identities to detect threats across markets while ensuring friction-right user experiences. The solutions, all part of the TruValidate suite, fuse traditional data science with machine learning to provide businesses unique insights about consumer transactions, safeguarding tens of millions of transactions each day.

“Fraud can have a potentially disastrous impact on a business’s and a consumer’s finances. In our increasingly digital economy, being able to spot fraudulent transactions whilst still providing genuine consumers with a great experience is a balancing act that organizations need to solve. By using the latest solutions, businesses can build trusted relationships and transact with confidence knowing they are safeguarding both themselves and the consumers they serve,” concluded Arellano.

For more details about the above findings, visit this blog post.

¹The percent or rate of suspected fraudulent digital transaction attempts are those that TransUnion’s customers either denied or reviewed due to fraudulent indicators compared to all transactions it assessed for fraud

Before the pandemic, the percentage of the Filipino population that was credit visible was increasing with growing momentum, and although it has continued to increase during COVID-19, the rate has slowed significantly. When COVID-19 hit, financial institutions shifted from a growth mindset characterized by increasing customer acquisition volumes, to a more cautious and reactive mode focused on managing their existing portfolios and ensuring that they didn’t become riskier as a result of the prevailing economic conditions and general uncertainty.

Unfortunately, developments on increasing the banked population and extending loans to entrepreneurs or consumers hoping to take the next steps in their lives (e.g., owning assets like property) were derailed or delayed by the pandemic. There are still tens of millions of Filipinos who aren’t credit visible and as such could have limited access to credit products and other services. However, as the country moves to recuperate from the economic impact of COVID-19, TransUnion believes that the key to recovery lies in regaining the growth mindset, backed by the power of information.

“Prior to the pandemic, financial inclusion in the Philippines had been increasing at pace. A greater volume of institutions sharing financial information had enabled more consumers to access a greater range of financial services and products. TransUnion’s priority when the pandemic hit was to ensure that services to our members and consumers remained business as usual even under lockdown, not only to honor our obligations but to really support them through the crisis. The whole situation was unprecedented, and it impacted our members and potential members differently. Now that the Philippines and the global economy is looking to the future, it’s important that everyone focuses on growth and joining together to help recovery efforts,” said Pia Arellano, TransUnion Philippines president and CEO.

In the modern economy, credit reporting agencies play a crucial role in enabling financial institutions with solutions to help identify trends and customer pain points, as well as understand credit history and predict likely future scenarios on the financial state of consumers and businesses. This helps lenders confidently make decisions, even in uncertain times, whilst more accurately predicting risk.

TransUnion, through its partnerships with various financial institutions like banks in rural areas, champions greater financial inclusion by bringing lenders into the wider credit information ecosystem. This allows consumers with previously limited data in the system (as a result of only interacting with lenders not previously sharing data) to be on the radar of both big and smaller banks looking to increase the provision of products and services. In the same way, lenders contributing data are also empowered to be more competitive in the industry because of the insights and technology solutions that they gain access to.

Old problems, new solutions

As the pandemic has continued, more challenges have surfaced for financial institutions. Prolonged lockdowns and subsequent rises in unemployment have affected people’s income and household finances and their capacity to meet credit obligations. While regulatory measures were put in place to manage the potentially negative impact on creditworthiness and, ultimately, individuals’ or businesses’ access to financial services, the situation called for innovative solutions that better respond to the prevailing challenges.

In addition, as people have had to live their life more online under pandemic restrictions, the demand for financial services that are obtained via digital platforms has shot up. Financial institutions have had to commence or accelerate their digital transformation efforts to keep up with both the sudden market demand and the competition from FinTech and other new players, all while dealing with the rise in attempted fraud cases during the pandemic, especially during its early days.

TransUnion’s contribution has been the introduction of new core solutions which tackle old problems that came in new forms during the pandemic. For instance, it started harnessing the power of trended data and additional variables/attributes that expand understanding of consumer credit behavior. These have enabled businesses to continue and even extend support to previously unbanked consumers. It also launched its seamless onboarding solution which provides financial institutions with transformative digital capabilities while helping mitigate fraud before it happens. Such support reaps benefits that extend even beyond the challenges of the pandemic.

“Our advocacy for re-establishing a growth mindset to aid economic recovery is underpinned by our promise that we can help create a reliable basis for mutual trust between lenders and consumers. At this point, our goal is to keep empowering financial institutions to solve old problems in new and better ways. This stems from the fact that TransUnion sees information not just for what it can do, but for what it can help people achieve. It’s how we plan to do our part in the bayanihan efforts to recover from this crisis as one nation,” Arellano said.

2020 forced shifts and developments in businesses, and 2021 is the time to focus on sustainable growth and greater stability. Implementing and streamlining strategies for the digital space remains a key focus and providing access to convenient digital experiences is now what consumers expect. While balancing risk is still necessary, a cautious return to rebuilding and lending to new customers is possible through informed decisions.

Arellano concludes: “It is a monumental task, but the Philippines has proven its capacity to bounce back from crises stronger than before. TransUnion understands its unique position to provide data-backed guidance and technology solutions to help businesses and consumers make more informed finance decisions during these uncertain times and contribute to nation-building and the country’s eventual economic recovery. Together, we can all succeed.”

“The likely explanation for this decline is that fraudsters recognized that e-commerce providers are doing a good job stopping fraud and have moved elsewhere for the time being,” said Pia Arellano, TransUnion Philippines president and CEO.

Heading into the holiday shopping season, the TransUnion Financial Hardship Study conducted from Oct. 28 to Nov. 5, 2020 found 37% of 9,515 consumers surveyed globally said they had been targeted by digital fraud related to COVID-19, a 28% increase from the same survey the week of April 13, 2020.

“Our survey shows fraudsters are increasingly utilizing the pandemic to prey on consumers facing mounting financial pressures. With the COVID-19 pandemic accelerating the move from offline to online transactions, detecting digital fraud attempts has become paramount for e-commerce providers,” said Arellano. “In order to avoid cart abandonment with all of these new sales opportunities, it is equally if not more important to ensure consumers are able to make friction-right or hassle-free digital transactions.”

In addition to the above findings, TransUnion released the following fraud trends to help businesses be more aware of which days and times of year to increase their fraud controls:

The percent of suspected fraudulent e-commerce transactions coming from the Philippines during the start of the holiday shopping season and entire year from 2018 to 2020

• 4.82% from Nov. 26 to Nov. 30, 2020; 4.61% so far in 2020
• 7.23% from Nov. 28 to Dec. 2, 2019; 6.05% all of 2019
• 3.55% from Nov. 22 to Nov. 26, 2018; 3.04% all of 2018

The days with the highest percent of suspected fraudulent e-commerce transactions coming from the Philippines during the start of the 2020 holiday shopping season

1. Cyber Monday, Nov. 30: 5.16%
2. Saturday, Nov. 28: 5.09%
3. Sunday, Nov. 29: 5.01%
4. Thanksgiving, Nov. 26: 4.49%
5. Black Friday, Nov. 27: 4.47%

“The pandemic has caused global economies to decline but fraud has remained constant. Despite the economic downturn, digital transactions remain strong and we expect that fraudsters will follow this trend by targeting e-commerce companies and their customers. Businesses must provide friction-right identity verification solutions and consumers must do their part by keeping their personal information secure to combat this threat,” Arellano said.

Meanwhile, the Philippine House of Representatives has advanced House Bill 7805 (Internet Transactions Act), which aims to protect consumers and merchants engaged in internet transactions that include retail, online travel services, digital media providers, ride hailing services and digital financial services.

As a leading provider of information and insights in over 30 countries, TransUnion uses its Global Fraud Solutions to unite both consumer and device identities to detect threats across markets while ensuring friction-right user experiences. The solutions fuse traditional data science with machine learning to provide businesses unique insights about consumer transactions, thereby safeguarding tens of millions of transactions each day.

For an infographic about TransUnion’s holiday online retail findings, go here.

¹Suspected fraudulent and risky transactions are those that TransUnion’s customers either denied or reviewed due to fraudulent indicators

There is no standard measure of financial health as each person’s circumstances are unique, but there is one aspect to finance that is often misunderstood, and that is credit. Credit is an important part of the economy because it allows entities and consumers to engage in transactions now that may not be possible if they only rely on their current capacity.

Anyone who has a credit card, loan, bank overdraft, or other similar credit agreements has a credit report – a record of how they manage their credit obligations, collected and aggregated by credit agencies like TransUnion. When borrowers honor their obligations, there’s no reason to see credit in a bad light, especially as it helps the economy grow faster this way. But how do you manage credit in the middle of a pandemic?

“A healthy credit history can help determine a consumer’s ability to access financial products and their ability to get competitive deals. At TransUnion, we are working with financial institutions to help them better understand consumers so they can continue to provide them with the financial services they need. TransUnion’s data quality assurance team stringently reviews credit data contributions and ensures that consumers are being accurately represented so their access to financial services remain unhampered during the challenges presented by COVID-19,” said Pia Arellano, TransUnion Philippines president and CEO.

Regulatory and institutional safeguards notwithstanding, there are a number of habits that consumers can practice to maintain good credit health even amid a pandemic:

1. Pay bills on time

Make it a point to not miss any payment deadlines, even if you can only pay the minimum amount. Automate it if possible or set alarms if you must. The purpose of a credit report is to help lenders see whether or not you miss payments and predict a behavior pattern for the future.

There are grace periods accorded to consumers during the pandemic, so it’s best to be aware of the policies implemented by your bank or financial institution for your convenience. Depending on your case, you may need to contact them directly to arrive at a repayment plan that suits your needs at present. However, if you can pay as soon as the bills come in, do so and you’ll have less to worry about.

2. Set a budget and stick to it

The economic impact of COVID-19 is likely to extend over many years and having the discipline to stick to a budget and not over spend now will benefit you in the long run. In addition, do not apply for several new accounts at a time. Having a lot of simultaneous inquiries on your credit report worries lenders as it is a sign that you might be using credit and loans to supplement your income because you are spending beyond what you can actually afford.

3. Maintain low balances

Credit cards are considered “maxed-out” when you have spent 90% or more of the credit limit. When you maintain lower balances, lenders view you as someone who uses their credit responsibly. To achieve this, you should be able to pay your bills in full, on time, every time.

4. Build a strong relationship with lenders by being a responsible borrower

Lenders recognize that with higher credit limits comes increased responsibility. Credit limits tend to be reflective of both your wider financial standing as well as historic account conduct. A high credit limit reflected in your credit report can signal to lenders that you are a trustworthy candidate for new lines of credit. Should an unprecedented event such as this pandemic arise, you know that you’re in a position to access financial products at competitive interest rates if you need to.

5. Beware of phishing and other scams that proliferate even during crises

A recent TransUnion report found that fraudsters are decreasing their schemes against businesses but increasing COVID-19 focused scams against consumers online. With the rise in digital transactions in banking, make sure you do not fall victim to fraud activities like account takeover or unauthorized account opening schemes that can taint your credit report. As a general rule, steer clear of offers that sound too good to be true. Legitimate financial institutions can never provide miraculous results in the short-term. Other precautions include doing a regular review of your bank accounts for any suspicious activity, never providing sensitive information such as PINs and One-Time Passwords, and keeping your information secure against phishing attacks. It’s worth looking into password managers and updating your passwords on your bank accounts every so often. If you need to communicate with your bank, stick to its official channels.

6. Contribute to a savings fund

Building an emergency fund is generally considered good practice in your overall budgeting and serves to keep your credit health in check as well. Having enough funds on hand will help cover credit obligations, keeping you in good credit standing until you recover and things stabilize again.

Navigating the road to economic recovery

Build and keep the above-mentioned habits and you’ll maintain a good credit standing and overall financial health. Now, what should you do if you still cannot pay your bills at this time due to sudden loss of income or other extreme circumstances?

Consumers should coordinate with their bank or financial institution to explain their situation. Generally, consumers can request a payment holiday, lowering of monthly payments until they have fully recovered, or restructuring of a loan or credit facility for a smaller payment amount and longer tenure. Needless to say, it helps if you are in good credit standing to begin with.

As a seasoned and trusted global data steward, TransUnion recognizes its unique position to help consumers as they pursue economic recovery by helping financial institutions address current uncertainties using the power of information. Building on its database of 25 million account points that features a more holistic and insightful view into consumer behavior, TransUnion has started harnessing trended data that looks at richer information from a longer period of time (24 months payment history) to determine a consumer’s current and likely future financial situation. This, in turn, gives businesses quality information to continue supporting customers even in uncertain times such as the pandemic. When done right, everyone contributes to helping the economy bounce back stronger.

“We’ve been called to do bayanihan to recover as one, which essentially recognizes the need for us to work together to fully address current financial challenges. Our mission at TransUnion is to use the data that we have to help businesses and consumers make smarter finance decisions, especially during difficult times like this pandemic. We hope to continue creating a virtuous cycle of empowered businesses that empower consumers to gain access to financial services which can uplift their lives and financial health, as we believe this contributes a great deal to their physical and mental well-being too,” said Arellano.

For more information about maintaining your credit health, you may visit TransUnion’s FAQ page.

“COVID-19 has dramatically accelerated digital transformation with 78% of Philippine executives surveyed as part of our study saying their organization has changed their digital transaction process due to the pandemic,” said Pia Arellano, TransUnion Philippines president and CEO. “But all of this digital progress will be wiped out if we can’t remove these barriers to building bilateral digital trust. For instance, 70% of Philippine executives in the study who said their company changed their digital transaction process as a result of the pandemic experienced glitches.”

In addition to the above findings, nearly 84% of Philippine and 85% of global executives surveyed as part of the study said they believe smooth transactions are “essential to business survival” rather than merely a competitive edge during and after the pandemic.

The report, “New Dimensions of Change: Building Trust in a Digital Consumer Landscape,” included responses from 1,610 executives in Brazil, Canada, Chile, China, Colombia, the Dominican Republic, Hong Kong, India, the Philippines, South Africa, the U.K. and the U.S, including 115 Philippine executives. The research uncovered how technologies like artificial intelligence (AI), national digital IDs¹ and super-apps² can help overcome hurdles and possibly create new challenges to building digital trust.

New Technologies vs. Fraud

Overwhelmingly respondents answered that: 1) biometrics³ will be the dominant payment customer authentication method; 2) improved fraud detection and security is the greatest benefit to using AI; and 3) a national digital ID system will help prevent consumer fraud.

Approximately 92% of Philippine and 85% of global executives say biometrics are likely to be used to authenticate the vast majority of payments in the next 10 years. About 46% of Philippine and 43% of global respondents noted that improved fraud detection and security is the greatest benefit to using AI. This was the top selection by far with smoother customer experience being the second most used answer globally at 29% worldwide and 23% in the Philippines.

Furthermore, the vast majority of executives, 84% in the Philippines and 79% globally, think national digital IDs will help fraud prevention in consumer transactions. Seven in 10 executives globally and 77% in the Philippines believe a national digital ID gives low-income groups access to consumer services they would have previously been excluded from. By industry worldwide, respondents from consumer lending and telecommunications think such IDs give lower-income groups access to services they might otherwise lack. Both industries have led the way over the last decade in reaching the community of financially underserved customers, manifested in innovations like microfinance and mobile money. The Philippine Statistics Authority says it will begin registering Filipinos for the Philippine national digital ID, “Phil ID,” in the 4^th quarter of 2020.

“Ensuring consumer trust starts with preventing fraud. Our research overwhelmingly showed that biometrics, AI and national digital IDs aren’t just a fad for consumer fraud prevention. They are key for trusted commerce for the foreseeable future,” said Arellano.

Entrusting Personal Data

About 82% of Philippine and 73% of global executives believe consumers are comfortable sharing personal data with private companies. Nearly 71% of worldwide and 79% of Philippine executives believe consumers are comfortable sharing personal data with governments. Brazilian, Chinese and Dominican Republican executives have vastly differing views about whether or not consumers are willing to share data with private companies versus government bodies (more than 10% difference in each country between sharing with governments and companies). Chinese respondents believe consumers are much more comfortable sharing personal data with government bodies than companies, while Brazilian and Dominican Republican executives have the opposite belief.

“Technological innovations like AI, biometrics and national digital IDs paired with proven fraud prevention methods like device intelligence can provide a more convenient and inclusive way for consumers to transact that still protects security and privacy,” Arellano concluded.

For the survey findings and registration information for a Dec. 3 webinar about the study, go to the

TransUnion Philippines report website.

¹National digital ID initiatives are government-administered programs to provide a digital identity to residents, often using biometric data to authenticate identity.

²Super-apps are single digital portals, predominantly accessed via smartphones, through which customers access and pay for third-party products and services.

³Biometrics are defined as fingerprint, facial recognition or voice authentication methods.

Already available in other TransUnion markets, TransUnion Seamless Onboarding has been recently launched in the Philippines to help both financial institutions and consumers experience an end-to-end digital (or digital-assisted) onboarding process that delivers a friction-right experience, while increasing conversions and loyalty, reducing fraud, and driving operational efficiencies.

Delivered via a single platform and a single API that significantly reduces integration time and effort for financial institutions, TransUnion Seamless Onboarding encompasses identity verification, fraud prevention, credit risk decisioning, and service orchestration to bring a differentiated and holistic solution to the Philippine market. As an example for consumers, this means being able to instantly apply for finance products like credit cards via mobile or at a branch near the point-of-sale and getting approved soon enough to be able to snag a store promotion for 0% installment exclusive to that credit card.

“Improving customer journeys may seem like an insurmountable task. Financial institutions are often reliant upon legacy or multiple systems and have to choose between maintaining those systems and developing new platforms. At TransUnion, we have focused on designing a service that delivers a full range of solutions that are easy to integrate for our customers, and our flexible orchestration and plug-and-play offering is configurable to meet evolving business needs. The service helps institutions rise above new challenges, including competition from progressive FinTechs, and help them create an environment and experience where in the end, both the provider and the consumer win,” said TransUnion Philippines President and CEO Pia Arellano.

Addressing Consumer Pain Points and Risk of Fraud

Even before the pandemic, financial providers in the Philippines faced large dropouts during onboarding both offline and online, largely due to inconvenient, confusing, and time-consuming application processes and slow turnaround. Recent studies by TransUnion Philippines found that most banks’ digital channels use application forms that are very cumbersome and provide a poor and lengthy customer experience. When applying via a website, the process could take over 40 minutes, as entry fields are often redundant.¹

In many instances, if applicants lose internet connection midway while filling in a form, they often need to restart the application from the very first page. Completed applications, meanwhile, require the consumer to go through a lengthy and manual verification processes involving multiple interactions with the bank agents. At bank branches, queues tend to be long and the verification is done manually or sometimes over the phone. On the other hand, turnaround times from credit application to approval take eight days or longer for 42% of credit cards, 51% of installment loans, and 91% of auto loans.²

Digital application processes that are not fast and easy and that don’t effectively balance the consumer experience with risk management can cause financial institutions to lose large numbers of potential customers, especially amid a fast-growing local financial services industry driven by technology trends. TransUnion Seamless Onboarding eases the burden of manual review and stitched-together onboarding setups from multiple providers. With this, financial institutions can deliver a streamlined experience wherein consumers can complete their application in one sitting – anytime, anywhere – without compromising their privacy or security.

Customer safety when doing online transactions is even more important now as a recent report by TransUnion found that suspected fraud originating from the Philippines during the period from March 11-April 28 increased by 119% compared to the pre-ECQ levels. With TransUnion Seamless Onboarding, the Philippines’ financial services industry will be able to address the increased risks of fraud that come with the rise in digital transactions as people continue to observe social distancing.

“TransUnion Seamless Onboarding encompasses a multi-layered fraud strategy that leverages TransUnion’s vast offline and online data, insights, and analytics to not only create a great experience for good customers but also effectively trap fraudsters. This way, we enable institutions to benefit from a more accurate risk assessment and reduced false positives,” Arellano said. “What we essentially offer is a holistic solution to the various facets of the digital journey within the finance industry, most especially in this uncertain business climate. There is significant opportunity to support digital transformation in the finance sector to further drive economic opportunity in the Philippines. While internet connectivity is yet to reach its full potential on this side of the globe, the current reality calls for innovative ways to reach the unserved and underserved markets, and TransUnion Seamless Onboarding may just be the missing link to finally close that gap.”

More information about TransUnion Seamless Onboarding can be found here.

¹TransUnion PH “mystery shopping” onboarding study, 2019. Statistics cover credit card and personal loan applications, averaged across channels and lenders studied.

²2019 TransUnion PH study on turn-around-times from credit application to approval for credit cards, installment loans, and auto loans

By analyzing up to 24 months of financial information, versus the conventional approach of looking at data at a single point in time, CreditVision provides a deeper understanding of the consumer’s current and likely future financial situation, enabling more accurate lending decisions. TransUnion’s CreditVision has empowered lenders to offer loans to millions of new customers and new-to-credit individuals in global markets and is set to transform lending in the Philippines where it is unique: the only trended data product available in the market.

CreditVision’s breakthrough capabilities come at an important time, as the economic downturn due to the pandemic is causing rapid shifts in consumer financial situations and changes in consumer actions. CreditVision builds on TransUnion Philippines' database of 24 million account points that features a more insightful, holistic view into consumer behavior. The trended data solution gives businesses the clarity and assurance needed to lend, predict risk, and continue to support consumers during uncertain economic times. More reliable and highly predictive trended usage and payment data becomes even more valuable when recent signs of consumer financial stress are invisible to lenders; now often the case under COVID-19.

“It is crucial for the finance industry to be proactively identifying both risks and opportunities early on to mitigate credit losses and strengthen customer relationships during these trying times. CreditVision provides a more stable view of which consumers represent good credit risk, positioning it to drive strong consumer and business benefits as the country navigates challenging economic conditions. It also helps those who were previously under the radar be considered as the additional variables and attributes now in play help lenders understand shifts or patterns in the consumer’s behavior, which will enable lenders to offer the right products,” said TransUnion Philippines President and CEO Pia Arellano.

Getting a more complete picture of a customer’s total debt obligation and payment behavior is key to getting an early indication of risk profile changes and being able to make the best decisions in this rapidly evolving crisis. TransUnion’s technology-assisted solutions are specifically crafted to strengthen capacities in order to help effect positive outcomes within the business community and the local economy as a whole.

Extensive Benefits

CreditVision’s trended credit data and proprietary algorithms help lenders achieve better results by truly understanding consumers’ needs and predicting future customer performance more accurately than traditional risk scores. It also allows organizations to lend with more confidence during the COVID-19 pandemic by providing a more comprehensive understanding of consumers who have over time represented good credit risk.

Designed specifically with account management strategies in mind, CreditVision allows lenders to understand consumer behavior to a degree not previously possible, giving a dynamic view of changes in balances, shifts in utilization, payment amount, payment history and more. In contrast to traditional models, lenders can see whose credit behavior is improving over time.

With CreditVision, lenders can both manage losses by pinpointing consumers showing signs of financial stress and improve the customer experience, offering better rates and terms on credit products. This empowers lenders to effectively manage risk and find new revenue opportunities.

TransUnion’s CreditVision delivers strong benefits and creates significant value across the consumer lifecycle, including:

• Onboarding applicants who may otherwise have been rejected;
• Reducing acquisition costs; and
• Improving decisioning across score bands with more granularity and accuracy.

Demonstrated Effectiveness

First launched by TransUnion in the United States, CreditVision has proven highly effective in regions where TransUnion has comprehensive credit data, including Canada, India, Colombia, South Africa, Hong Kong, and, most recently, the UK.

TransUnion India, for instance, saw a client achieve a 28% increase in approval rates at the same risk when using trended data through CreditVision. Meanwhile, TransUnion South Africa saw clients achieve as much as a 56% increase in risk predictability, a 20% improvement in approval rates, and a 29% decrease in bad debt amounts on portfolios when using this approach.

“The bottom line is that being able to predict where a consumer’s performance is heading is actually much more important than where they are at a certain point in time. Prediction enables lenders to say yes to consumers more often because it enhances trust: lenders can see good payment performance of consumers in the past that were never visible before,” said Arellano.

“Some who never qualified for credit before will now be available in the lending market. In the same way, lenders can now offer competitive rates to a new generation of consumers, allow consumers to build up their credit background and increase economic opportunities. As such, the launch of CreditVision in the Philippines represents a major milestone,” concluded Arellano.

For more information or to learn how to benefit from TransUnion’s CreditVision solutions, get in touch through the website by clicking here.

In its assessment, TransUnion analyzed fraud trends to reflect the changing economic environment with COVID-19. It used March 11, 2020 – the date the World Health Organization (WHO) declared the coronavirus (COVID-19) a global pandemic – as a base date for analysis. TransUnion analyzed the billions of online transactions its flagship fraud and identity solution, IDVision with iovation, assessed for fraud indicators on more than 40,000 websites and apps globally. It identified more than 100 million suspected fraudulent digital transactions worldwide from March 11-April 28.

“Given the billions of people globally that have been forced to stay at home, industries have been disrupted in a way not seen on this massive of a scale for generations,” said Pia Arellano, President and CEO at TransUnion Philippines. “Now that many transactions have shifted online, fraudsters have tried to take advantage and companies must adapt. Businesses that come out on top will be those leveraging fraud prevention tools that provide great detection rates and friction-right experiences for consumers.”

Examining Digital Fraud Impact on Industries

TransUnion analyzed the following industries for a change in the rate of suspected digital fraud against them, comparing the periods of Jan. 1-March 10 and March 11-April 28.

Suspected Digital Fraud Post-Pandemic Declaration

TransUnion’s data shows that as social distancing changes shopping patterns, fraudsters have taken notice and targeted the more digital forward industries while following the money globally. Telecommunications, e-commerce and financial services all have large digital adoption, financial information and payments at the center of their online experience, and thus digital fraudsters targeted them more compared to other industries during the pandemic worldwide.

Globally post-pandemic, the most common types of online fraud in telecommunications—the industry with the highest percentage of suspected digital fraud growth from the Philippines—are credit card fraud and account takeover/hijacking. The types of online fraud from the industry with the second highest rate of suspected digital fraud growth from the Philippines—financial services—are identity theft and account takeover/hijacking globally.

Philippines Top Globally for Suspected Logistics Fraud

TransUnion’s analysis also detected the Philippines as the country with the highest rate of suspected online fraud originating from it targeting the logistics industry during the pandemic. The overwhelming type of digital fraud in logistics TransUnion sees is shipping fraud wherein criminals typically take over a customer’s account but don’t change the shipping address in order to avoid detection. Once the package has shipped, they intercept it at the carrier website and change the shipping address.

Most of these statistics involve transactions that the TransUnion IDVision with iovation suite of solutions identified as suspected fraudulent to its customers before any fraud occurred. IDVision with iovation unites both consumer and device identities. It fuses traditional data science with machine learning to provide businesses with unique insights about consumer transactions, safeguarding tens of millions of transactions each day globally.

For more information about TransUnion Philippines and its suite of solutions, visit https://www.transunion.ph

“We all have a responsibility to support businesses and consumers however we can, and we at TransUnion are uniquely equipped to help not just our customers but the wider industry and the Philippine economy as a whole. Despite the unprecedented situation the global economy is now in, businesses cannot afford to be hasty, especially when we have data to help guide their decision-making processes. TransUnion’s mission is to deliver information for good and we’re keen to support the government in its aim of promoting greater economic stability and strength in our country, especially amid these extraordinary times,” said Pia Arellano, TransUnion Philippines President and CEO.

Inasmuch as doctors diagnose patients before prescribing medicine or treatment, TransUnion’s portfolio health check service provides various lenders with a comprehensive view of their borrowers’ credit relationships across multiple lenders, together with portfolio risk management tools such as credit scores and credit attributes that reliably identifies and segments the high risk versus the medium and low risk customers in the portfolio.

Consumers’ situations can change very rapidly especially during economic downturns, and it can be very challenging for lenders to identify high risk accounts from low risk accounts and optimize their portfolio performance if it is not being monitored regularly. The more frequently the portfolio is reviewed, the greater the ability of the lender to effectively mitigate increasing portfolio delinquencies and losses and bring about better portfolio health.

In support of the government’s planned program of interventions, TransUnion is briefly opening up its portfolio health check service to non-members and has already reached out to key financial industry stakeholders like FintechAlliance.ph, the trade association of key players in the fintech industry in the Philippines. Being custodians and stewards of comprehensive financial data across almost 24 million trade lines/accounts to date (and growing), TransUnion can provide critical insights that will help financial institutions proactively manage their portfolio. It will also help define appropriate strategies to respond to consumer concerns and extend tactical help such as targeted interventions like emergency loans.

“We believe in building and expanding a sustainable digital finance ecosystem that benefits every Filipino, and for that, we cannot waver from our duties no matter the situation. If we are to succeed in this fight, fear or pressure should not trump our better judgment. FinTechAlliance.ph is encouraging all members and other financial institutions to participate in this endeavor so we can all work as one and do everything in our power to protect and revive our economy,” said FinTechAlliance.ph Chairman Lito Villanueva.

Enterprise rehabilitation

Small businesses and microenterprises play a significant role in developing the Philippine economy, yet they are among the most greatly affected and further marginalized by the current situation. Along with the millions of daily wage earners, MSMEs will benefit most from the loans and other forms of financial assistance that lenders are planning to roll out to help reboot and recover losses due to the lockdowns. TransUnion’s credit profiling will give lenders a clearer line of sight on their customers and help them approach any government directive with confidence.

“DTI recognizes that thousands of small-scale businesses are being affected by the enhanced community quarantine, with a majority being forced to shut down for the time being. While we have measures in place like grace periods for rent payments and other programs that provide funds for concessional lending to MSMEs, portfolio health check empowers banks and lenders to act confidently knowing they are managing risks while continuing to extend support to consumers and MSMEs. We need our financial institutions to continue extending loans with favorable terms to help our MSMEs to recover so that they can revive their businesses and get back on a growth track,” said DTI Secretary Ramon M. Lopez.

Given the Mandatory Grace Period and non-imposition of interest on interest, fees, and other charges for all loans with dues falling within the ECQ period as stipulated in the Bayanihan to Heal as One Act (R.A. 11469), TransUnion Philippines has proactively reviewed its data reporting policies and issued guidelines to arrive at the most optimal data contribution structure to prevent the impact to affected consumers while also maintaining the accuracy and integrity of the bureau databases so lending activities can continue. In general, these guidelines aim to ensure that the consumer’s current credit data position remains to be reliable for the duration of the emergency Payment Freeze or Mandatory Grace Period.

“Our aim at TransUnion has always been to provide our customers with critical data and powerful insights, which will allow them to make quicker, better, and more informed decisions. If we can bring a little more certainty to this unpredictable world by providing such data and insights to all the players in the financial industry, we believe we are one step closer to achieving our mission of information for good,” Arellano said.

Financial institutions interested in availing the free portfolio health check service only need to ensure that they have the necessary consent from their customers as required in the Data Privacy Act. As a global big data company, TransUnion is backed by sophisticated technology that ensures data security and compliance with local and international data privacy laws. The offer is valid until further notice. For inquiries and other details, contact Karen Dioso, Senior Manager, Business Partner Solutions from TransUnion at KarenAstrud.Dioso@transunion.com.

More information about TransUnion Philippines and its suite of solutions may be obtained at the website https://www.transunion.ph/

Banks and other financial institutions have everything to gain in harnessing disruptive technologies like big data analytics in their operations as even the Bangko Sentral ng Pilipinas (BSP), the country’s chief finance regulator, recognizes that the digital transformation of the financial services sector is the new frontier.

For TransUnion Philippines President and CEO Pia Arellano, “Information is a very powerful thing. Information drives business, opens doors, and empowers and enriches the lives of consumers. Change and transformation, however, can come with many implications, and the path to innovation and new technological solutions is not necessarily always an easy one. It involves courage, a willingness to learn and evolve, and a consumer-first mindset.”

The use of big data, with its capability to collect, process, and analyze information in large volumes, has been continuously driving innovation and the transformation of the landscape within the banking industry. Financial institutions are adopting big data analytics to gain a competitive edge and better serve their customers as they continue to augment and improve the intricate complexities of their banking operations that result from the rapid proliferation of data.

According to a BSP-published research paper, big data for the finance and banking industry is all about making better sense of customer behavior to achieve more accurate assessments of customers’ creditworthiness, risk appetites, and qualifications, while at the same time enabling financial institutions to offer improved products and services to their clientele.

Big data’s economic impact

Big data is the extensive collection of varying information that can be generated and analyzed at optimal speed and mined for informative and analytical purposes. However, the majority of finance companies that participated in a study by TransUnion and Versta Research said that data and analytics are evolving faster than their own internal capabilities. Together with ever increasing consumer expectations, the evolution of data and analytics poses a challenge for businesses to analyze data in the speed the market demands.

To meet with the challenge, insights from the study show that business leaders use analytics tools as a competitive advantage to yield more room for growth. TransUnion, for instance, has started to harness the power of trended and alternative data to more accurately predict credit risk. Its members can now leverage this power to cross-sell the right products to the right customers.

Big data analytics benefits both ends of business interaction. It not only pushes industries to identify and resolve certain business deficiencies, but also allows them to better understand their customers and better meet their needs. On the other hand, it serves as an avenue for consumers to be able to relay what they need and expect from their product and service providers, and, in turn, be heard.

“The vast amount of information produced by businesses every day, coupled with continued technological advancements, is becoming the catalyst for the acceleration of the global economy. The big data chain ultimately leads to knowledge and solutions, which present new opportunities that will enable a new range of products and services for both the business end and the customer. On a larger scale, big data affects the global economy more significantly than we realize, and it will continue to do so as technological advances further progress,” Arellano said.

TransUnion Philippines is a sophisticated, global risk information provider and credit bureau dedicated to finding innovative ways information can be used to make better and smarter decisions. It provides analytics, integrated solutions, insights, and other invaluable information that facilitate objective, fast, and reliable credit decisioning for lenders. TransUnion Philippines holds an annual Big Data Summit that gathers industry thought leaders and stakeholders to tackle current issues and developments in the hopes of opening dialogues and exchanging ideas aimed at moving the industry forward. For more information about TransUnion Philippines and its suite of solutions, visit the website https://www.transunion.ph

For years, rural banks have served as the main access point for basic financial services for a large number of Filipinos, providing deposit and credit facilities to communities in which they operate. The data-sharing partnership with TransUnion, which will see a greater number of lenders contributing information to consumer credit reports, is expected to help RBAP members further enhance their consumer offering.

With credit information sharing including positive information on payments that Filipinos are successfully maintaining, consumers will potentially have access to new or additional loans as rural banks become better able to manage risk and assess a consumer’s creditworthiness.

“Our partnership with TransUnion will help facilitate an increase in business coming into rural banks. By using data-based, analytics-driven solutions, we expect the volume of lending to grow as the decision-making process becomes more fluid. Ultimately, this will have a positive impact on the bottom line of each member rural bank. For RBAP, the partnership continues to make true the promise that the Association made to its members ─ Walang iwanan (No one is left behind.),” said former RBAP President Dr. Armando Bonifacio.

“The availability of accurate and more extensive credit information is an important catalyst to an efficient credit ecosystem which can help fuel and support further economic growth. Providing rural banks with a more complete picture of a person’s creditworthiness helps open up more financial possibilities, giving consumers access to credit that might have been inaccessible to them before this partnership,” said TransUnion Philippines President and CEO Pia Arellano.

“When lenders utilize more complete credit information, it enables them to make more informed lending decisions – benefitting them and the consumers they serve. TransUnion prides itself on using ‘Information for Good’ and this new partnership has the potential to benefit consumers, businesses, and the Philippine economy as a whole.”

The collaboration will open up the possibility of new lines of credit for much-needed investment and a wealth of other opportunities. TransUnion’s comprehensive suite of solutions and its commitment to data quality standards will also help protect Filipinos from fraud by helping validate and check genuine applications for new financial products.

“Rural banks are, by design, champions of financial inclusion. Our partnership with RBAP is a huge milestone as it will only strengthen that mandate and allow rural bankers to address modern challenges through the power of information. In the end, all of it supports our own efforts at expanding Filipinos’ access to credit and making sure that economic growth is inclusive,” continued Arellano.

RBAP was founded in 1955 to promote the general welfare and safeguard the interests of rural bankers, as well as study and devise ways and means of making rural bank facilities more responsive to the needs of people in rural areas. Since then, it has been instrumental in promoting comprehensive rural development and expanding productivity to raise the quality of life, especially of the underprivileged.

A leading global risk and information solutions provider, TransUnion works on a data-sharing model and provides consumer reports, risk scores, analytical services, and decisioning capabilities exclusively to member businesses. These members embed TransUnion’s solutions into their own process workflows to improve their capabilities in areas like customer acquisition, assessment of consumers’ ability to pay for services, debt collection, consumer identity verification, and investigation into potential fraud.

TransUnion Philippines was incorporated in 2011 by the country’s five biggest credit card issuers ─ BDO, BPI, Metrobank, Citibank, and HSBC. It is backed by a sophisticated technology infrastructure that helps ensure data security and compliance with privacy laws. For more information about TransUnion Philippines and its suite of solutions, visit the website https://www.transunion.ph

TransUnion is a comprehensive credit bureau and information solutions provider in the Philippines, which now features more than 20,700,000 account records in its database as of April 2019. This is a remarkable 570 percent increase from the baseline data of almost 3,100,000 total account records in 2012.

Of the total number of account records, approximately 13,700,000 are open trade lines (e.g. open mortgages, credit cards, loans, bank overdrafts as well as other credit agreements) from a total of 8,800,000 unique consumers.

Over 50 organisations, such as banks and other financial institutions, contribute information and are currently active in the TransUnion Philippines ecosystem. About 20 more are onboarding soon, particularly from the rural banking sector. In addition to the largest commercial banks and credit card issuers, increasingly telecommunications companies and fintechs are contributing data for the benefit of consumers.

TransUnion provides substantial coverage, scope, and accessibility of credit information. Its consumer credit reports include important data such as repayments and any delinquencies. This allows member organisations to see a more accurate representation of the current financial standing of the consumer, so they can properly manage risk when providing credit and advance them the most appropriate product.

“The market is maturing at an incredible rate and is providing more and more benefit to Filipinos. Modern credit bureaus feature positive information about how people are maintaining loan payments, which in turn can provide them with access to further financial products at potentially more competitive rates,” said TransUnion Philippines President and CEO Pia Arellano. “Many Filipinos still don’t have a credit report, or have an incomplete credit report, and often find it difficult to open mainstream financial products. The increase in members contributing information to our database means we are able to help address this and increase financial inclusion.”

Confidence in the quality of data is also important. TransUnion does stringent checks during member onboarding in order to protect consumers and help ensure the information held is a true reflection of their credit history.

“The availability of accurate credit information is an important catalyst to an efficient credit ecosystem which can help fuel and support further economic growth. It’s ultimately about openness and collaboration. We’ve been working closely with our members for seven years now and businesses and consumers are seeing the benefits this brings,” Arellano said.

Based on current trends, TransUnion expects to see an increase in reporting of two to three million more trade lines by the end of 2019. The recent signing of rural banks will greatly contribute to achieving this target, and TransUnion is also encouraging utility companies, cooperatives, and the insurance industry to become new partners.

“Our data expansion efforts are well underway. We’ve been in talks with various industries, educating them about our solutions and the benefits it can bring for them and the consumers they serve. TransUnion believes in using information for good. We’re working hard to grow the credit ecosystem further, so that both businesses and consumers can harness its power,” Arellano said.

TransUnion works on a data-sharing model where members contribute updated information across their customer database, including payment history, in return for access to the data of other members. This helps members gain a more complete understanding of a consumer’s credit history. Apart from its extensive database, TransUnion also supports clients with analytics, integrated solutions, insights, and other information so businesses can manage risks while consumers can manage their credit. It is backed by sophisticated technology to help ensure data security and compliance with data privacy laws. For more information about TransUnion Philippines, visit the website https://www.transunion.ph

“Cross-border data sharing will assist OFWs in participating in the credit economy of their resident country and even after they decide to come home for good. It will help open up more opportunities to access credit for purposes like entrepreneurship, obtaining mortgages and personal loans, or accessing the rental housing market, which can translate into more income for remittance, expenditure, or investment,” said TransUnion Philippines President and CEO, Pia Arellano.

At present, however, it is only done in the European Union via limited inter-country reporting between credit bureaus and registries due to regulatory uncertainty, legislation changes, and non-agreement on risk assessment guidelines that are hampering credit reporting data harmonization between countries.

The infrastructure to allow a credit bureau in one country to send a consumer report—at the consumer’s request—to a lender in another country is still in a nascent stage and potentially faces some of the same regulatory uncertainty as bureau-to-bureau sharing.

“It’s a long way to go before we can fully benefit from cross-border credit data sharing. For one, we have yet to establish wider access to credit information among Filipino consumers right here in the Philippines. However, helping OFWs, which in turn translates into tangible economic benefits for the Philippines, is also a priority for us because it’s part of what we view as Information for Good,” Arellano said.

TransUnion is also currently exploring opportunities to permit consumers to request online that their report be provided directly to a lender in another country. TransUnion has also participated in government-industry forums to promote discussions on how best regulators and the industry can work together to provide Filipinos access to their credit information no matter where they are in the world.

“Eventually, it will all spur further growth in our economy. When the OFWs raise their standard of living through credit, the Philippine economy benefits through remittances, local expenditures, and further investments,” Arellano said. “We at TransUnion welcome the opportunity to continue those discussions and we call for additional government and industry dialogs to be sure all Filipinos have access to their credit information and benefit fully from that access.”