Previously known as Asia Collect, the firm that specializes in artificial intelligence and data-driven debt collection in the non-performing consumer loans market in Asia has announced its series A funding, accompanied by a rebrand.
«Field collection is becoming an unprofitable business. Lending has changed, so collecting has to follow suit. The key in all of this is data,» Arun Pai, Flow's chief strategy and sales officer, told finews.asia in an interview ahead of the firm's Wednesday announcement of a $6 million raise in its series A round.
Founded in 2016 by banking industry veteran Tomasz Borowski in Singapore, Flow works with financial institutions that provide consumer unsecured loans and uses an automated system that leverages psychology metrics to convince debtors to settle their debts. This efficiency means the firm can handle four to seven times the number of cases a traditional collection agency can handle.
More Effective Process
«There's a lot of money being pumped into the credit market space. The problem is that when a market takes a downturn, not much effort is being taken on the collections side,» said Pai, who joined the startup in March, after almost four years at AI-based asset management platform Kristal and eight years as a trader at Nomura.
The typical case handled by Flow averages $200 to $500. According to Pai, for the right kind of portfolio (those with a low number of days past due), the system is two to three times more effective than manual processes used by traditional debt collection companies.
Expansion Planned
Flow began operations in Vietnam, and later expanded to Indonesia and India. The startup has now secured the funds it needs to fund its growth initiatives, including the company’s geographical expansion and ongoing development of artificial intelligence (AI) models.
Backers for its $6 million series A round include development finance institution and KfW subsidiary DEG, Dymon Asia Ventures, SIG Asia and SCB10X, the venture arm of Siam Commercial Bank, the startup announced on Wednesday in a statement.
«Mutually Agreeable Solutions»
Pai acknowledged that the firm is likely to see an uptick in NPLs as a result of Covid-19, but said its collections process is ethical, responsible and understanding, as that approach fits both debtors and financial institutions.
«It is more important to try and work with debtors on mutually agreeable solutions,» Pai said, noting that the firm does not use threats or unprofessional practices that traditional debt collection agencies employ.
An expansion to the Philippines and Thailand is on the cards for 2020, said Pai, describing them as «massive markets» for non-performing loans. Flow is also looking at purchasing debt portfolios to bring some of the risk in-house, he said.
