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Grab – Asia's Uber – knows customers and drivers so well it can vet them for loans
Understands income streams, seasonality of sales, how hard drivers work, and safety records
Southeast Asia's Uber-clone turned superapp, Grab, collects so much data about its customers and drivers that it can rate their suitability for a loan – and is already a significant lender to its drivers.
Grab started life as a rideshare operator and did so well that Uber quit some Asian operations and acquired a chunk of Grab instead of competing head to head. Grab has since expanded into food delivery, insurance, payments, e-commerce, and even its own digital maps sourced in part from helmet cams given to its delivery drivers.
In August of 2021, Grab was already amassing 40TB of data a day – a number which, as the company clarified to The Register, included not only information collected from customers, but from drivers and partners too.
At an investor day today, execs detailed that the data Grab collects is being used to fuel its lending business.
Investors were told that the company offers pre-approved personal loans to drivers, that 30 percent of drivers have an active loan, and those loans increase the gig employer's usage of the app by 13 percent.
"Many other fintech and banking institutions would like an ecosystem like what we have, that's a big advantage," chief operating officer Alex Hungate told the event.
Hungate said Grab gains unique insights into individuals' behavior through "unconventional data" that reveals drivers' income streams, regularity and seasonality of sales, how hard drivers work, and safety records.
Grab feels its "unconventional data" is sufficient that, if shared with a financial institution, Know Your Customer (KYC) compliance would not be required.
"We take it seriously, but it's costly and fintech and banks must invest," said Hungate. "But for our fintech customers, before they start using our services, we already have lots of data about them so we only need a few KYC details to start."
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Hungate said once customers move from cash advances to personal loans, the company had already "gone down that journey with them" and had enough information that KYC was no longer necessary.
As both an employer of gig economy workers and a lender, Hungate said Grab can scoop loan repayments from drivers before they are paid.
Grab can do similar things for its consumer customers. Hungate explained those capabilities as follows:
We have payment history, insight to credit risk, without the ecosystem banks have and can extend business loans, and eventually a full suite.
Grab execs pitched the company's data-fuelled financial services as bringing loans to an unbanked segment of the world population. Company co-founder Hooi Ling Tan said 60 percent of the region's population was unbanked or underbanked. Execs also noted that gig workers struggle to secure loans.
Grab therefore feels its data trove means it is finding ways to address an underserved community.
Retailers are another target because integration of Grab's payment system and point of sale devices lets the superapp operator detect activity at a merchants.
Perhaps the most extraordinary thing about Grab's explanation of how it can use data was that execs delivered it without reference to privacy worries. Attendees were instead offered a vision of Grab as a champion of the downtrodden. ®