Faster, cheaper, better performance

Juris Technologies, a spin off and wholly owned subsidiary of parent company Natsoft, was founded during the Asian financial crisis of 1997. Founder and CEO, See Wai Hun said, “Back in 1997 when we started the company, we wanted to go into web technologies and big data. However the Asian Financial Crisis hit us head on and nobody was interested in these areas.”

Enterprise IT News has a chat with See about what the financial industry has in store for Malaysia and her company.

EITN: When you founded Juris Technologies, what were the shortcomings in debt recovery industry, that you wanted to address and overcome?

See: Non-Performing Loans rose from 6% in 1997 to 28% by the end of 1998. Many banking institutions had to take the defaulters to court and foreclose the properties in order to recover the debts but none of these banks had a system to help them manage the litigations or outsourcing activities to debt collection agencies. We grabbed this opportunity to create peer to peer networks (at that time there is no broadband available) between the banks and these third parties. That was our blue ocean strategy. Since then, we have already made everything web based and not only were we the first movers but the market leader in Malaysia for this industry.

EITN: How have you designed/architected your tech software solutions to be able to address them?

See: We had big challenges because we knew we had to go 100% web even though it was the late 1990’s when web technologies were still immature and web 2.0 was just a pipe dream. So we modelled ourselves on the leading web enterprises of the day such as Yahoo (remember them?), and developed our own application server technology with a shared architecture to ensure ultimate scalability.

We are still improving our application server to this day and have built an ecosystem that supports rapid application development and web 2.0 technologies.

Eventually we started looking at helping banks to collect debts at the earlier stage rather than recovering them when they turned bad. We became an enterprise based solution to implement strategies so that they can become better at collecting debts.

Our experience in data mining and back end recovery differentiates us from the competition as we have best practice framework for managing collection strategies and also best practice ready to go templates for managing litigation, outsourcing to debt collection agencies, repossession and disposal of vehicles, etc.

We provide true straight through processing where most parties are connected to the banks and bottlenecks are removed, like a super highway or freeway that cuts through the mountains in a straight line so that you can go faster. 

And of course, sometimes the loan quality deteriorates not because of poor collection strategies but poor selection of customers during loan originations or customer acquisitions. So, we moved up the value chain and started providing our banks with Loan Originations solutions to capture, vet through, qualify and underwrite new loans at the beginning of the loan cycle rather than collect from bad customers after you have accepted them.  

So, now we are able to provide a full end to end solution for managing loans and improving loan quality, from originations to collections and finally recovery of bad loans. 

EITN: What are the upcoming challenges you see the financial industry facing in near future?

See: Competition is fierce and with the recent Bank Negara rulings to curb household debt, it means that the banks are competing fiercely for the same customers. In order to succeed, Banks have to innovate in terms of products offered and improvement of service, especially turn around times to approve loans without sacrificing loan quality. That means, who is better, faster and cheaper wins. This is where our software comes in. Without an agile loan originations systems, banks have to rely heavily on manual processes which impacts costs, customer service and the ability to innovate. Our software enable the Banks to go-to-market with their new products much faster (more than 600% faster).

We also see recent thrusts for banks to manage their collections and recoveries better this year. Since 2010, the banks have been required to move to full convergence with International Financial Reporting Standards (FRS 139) which means that the banks have to recognize financial assets at fair value. 

The impact of this of course is that the banks are no longer just looking at Non Performing Loans but how well they are managing their arrears and delinquency as they now need to impair their loans based on the quality of the loans and how well they are managing their collections. Cost to Income ratios have also impacted the banks bottom lines and most of these costs boil down to how well they are managing their processes. If processes are not managed well, not only is collections and recoveries impacted (which impact their provisions for impairment), but low efficiencies will cost the banks to have higher cost to income ratios which also impacts their bottom lines. A small investment in technology will potentially provide a huge return on investment just based on these factors alone.  

EITN: Could you share about upcoming trends in the financial services industry in Malaysia (i.e. GST) and ASEAN?

See: In other parts of the world, such as US, Europe and Australia, we see new types of “banks” appear based on peer to peer lending. One of such social platform is Lending Club in the US which has recently went to IPO in December 2014 that has more than USD 6 Billlion in cumulative loans arranged by the club.

These are social platforms that allows individuals to borrow and lend to each other. It cuts out the middle man (the banks who essentially does the same things, take deposits and give out  loans) but operate on a much lower cost to income ratio as most of the platform is built on the internet with no brick and mortar costs.  This will be one of the major disruptions in the next few years if someone manages to market this well in the South East Asia region. In fact, one such platform, Lenddo, started in the Philippines in 2011.

Most banks in order to compete will have to think of the new digital online space as well as how to reduce their cost to income ratios. Innovations and investment in technology will be one of the key differentiating factors not only to profitability but to increase customer loyalty and customer advocacy. They have to break through the traditional barriers and become the bank of the future. 

EITN: Could you share about some of the customers that you have in your portfolio?

See: We have currently 13 banks using our solutions. These include HSBC, Bank Rakyat, Affin Bank, SME Bank. Telekom Malaysia (TM) is also a major customer and they are using our solutions to manage their credit limit and their collections.
   
EITN: What are the top business KPIs, you have helped them achieve in the past year, and what are the targeted KPIs they/you have set for them in the next say, 3 years?

See: Top business KPIs are improvement in speed which is usually translated in improved turnaround time not just in terms of managing loans but improving time to market for new products for loan originations. For collections, it is usually how much you can collect or recover which translates to reducing loan loss provisions, reducing non-performing loans, reducing delinquency flow through. And of course the last one is costs, which translates to improving efficiencies.  

Like I said earlier, the KPIs measure how do you become faster, better and cheaper.