Smile API Weblog

Barely over a year since Smile API's founding, the company has made a breakthrough in the Open Finance space in the Philippines by expanding its coverage of employment and income data service to 40 million Filipinos. Open Finance framework deals with finance data as a whole instead of just bank data. Jan Pabellon, Chief Product Officer of Smile API, said the 40 million Filipinos include basically anyone who is employed whether they are a gig worker or salaried employee. "We have dramatically expanded our footprint as our service now covers 40 million Filipinos consisting of 25 million salaried employees, 11.7 million self-employed individuals, and 4.1 million government employees," Jan disclosed. "We're unlocking better financial opportunities for Filipinos. This is now the major milestone we have reached at Smile." https://youtu.be/ZdsmGfHNdsQ Smile has so far linked with over 30 employment platforms, covering majority of workers in the Philippines, including several others in Indonesia that the company is able to link to in Smile's Artificial Programming Interface (API). Smile's API functions like a pipeline that allows for the smooth sending or exchange of employment and income data among workers, employers and financial services firms. As for its business customers, Smile is currently focused on financial services providers who are dependent on employment and income data to deliver their service or to lower their exposure to financial risk. "Since day one, our vision for Smile API has been clear -- to be the one trusted source for employment and income data in Asia and right now there's a big opportunity here in the Philippines," Jan said. New Features, New Data One of the latest data that Smile is now able to provide is a worker's identity, employment history and insurance contributions data from the Philippines' social insurance systems. What aided the recent development was the creation of several new features to Smile's “Wink Widget” product: a JavaScript SDK (software development kit) to allow Smile customers’ end-users to provide permission for Smile to access their data. - Smile launched support for file uploads as well as enabling automatic recognition and digital conversion for certain types of documents, like photos, screenshots or scanned copies of documents, converting them into a machine-readable format via OCR or Optical Character Recognition. Improvements were also made to the API structure itself to accommodate the Wink Widget's features, all designed to help Smile's customers or the various companies and organizations get trusted employment and income information from their end-users. Benefit From Own Data Smile API CEO Jerome Eger pointed out that Smile empowers workers by practicing the same principle of Open Finance, and that is information from individuals whether employment or income data are owned and should be controlled by them. Jerome explains Smile helps workers to benefit from their own data. Whenever they use the Smile API interface it carries the information basically with the consent of the worker to a slew of use cases like cash lenders, buy now pay later, earned wage access, banks, among many others. "At Smile API, we believe that access to your own data is a basic right,” Jerome said. "We serve as a bridge between you and your financial goals. Because if you have no data, you are excluded from a lot of services that ensure livelihood

The financial world is undergoing a digital transformation. Banks and other financial institutions are increasingly adopting new technologies to streamline operations and provide customers with better services. One of the most significant changes in the digitization of Know Your Customer (KYC) processes. Know-Your-Customer or KYC is one of the essential parts of a loan application. Banks and other financial institutions are exposed to credit risk and compliance issues without proper KYC. But before there were online lending applications and platforms, loans were processed in bank branches face-to-face, using traditional KYC–collecting and verifying printed documents. What is KYC? - Image Source Know-Your-Customer (KYC) is a vital part of loan application processes where the borrowers are asked for their personal information for identity verification. Loan companies are tasked with checking their background to see if they have been involved in legal and financial issues, like violating laws and regulations within the financial industry. Background checks such as the one mentioned above show the value of KYC in a financial organization, like lending companies. It is a critical step to avoid credit risk and compliance issues. With the attempt at financial crimes globally, there are tighter regulations for BSFIs. Implementing appropriate KYC into loan applications ultimately protects financial companies from fraudulent exchanges. The challenge with traditional KYC processes In loan applications, borrowers must present printed copies of documents that loan operations specialists will verify and review. These documents will be the basis for banks and financial institutions on whether or not a borrower is qualified for a loan. However, acquiring personal data from government offices and HR departments can take days or weeks, depending on the volume of requests. On top of this, there is other bank paperwork that borrowers must answer before finally applying for a loan, asking for their personal information and confirming that the documents they submit are valid and legitimate. Depending on how many borrowers applied simultaneously, the process typically takes another few days or weeks to accomplish. Borrowers’ data are verified across the respective government offices and companies. With that said, it is evident that the overall loan application process using traditional KYC is time-consuming for both borrowers and lenders. Improve your KYC process with Smile API - With the digitalization of banks and other financial institutions comes the digitalization of loan applications. RegTech was introduced to the financial industry to address compliance and credit risk on online lending platforms, helping banks and other financial institutions with their digital KYC processes. It provides the data needed to ensure that the borrowers are not violating the Anti-Money Laundering Act. RegTech, through APIs, makes it easier for the BSFIs’ risk and compliance department to go through applications and verify the legitimacy of those documents. As the online lending space grows, many different APIs are being developed, utilizing different kinds of data–more than the traditional KYC. - Smile’s API taps into employment data sources for KYC. Connecting online banks and lending applications directly to government institutions, HR systems, and gig economy platforms can make it convenient for borr

Corroborating multiple types of information such as identification cards, proof of billing, certificate of employment, and pay slips have been used to assess borrowers’ credit worth for the longest time. However, underserved sectors such as gig workers do not have access to such paper documents. Recently, BSP is encouraging banks and other financial institutions in the Philippines to use alternative data to cover underserved sectors like gig workers or freelancers. Alternative data may mean borrowers’ telecommunication data, bank statements, web behavior, and social media data. All of which may be used to assess credit worthiness. Despite its usefulness, how reliable can alternative data really be? How this impacts credit risk managers Credit risk managers have a crucial role in loan approvals because they set the standards for who good-paying borrowers should be. Alongside credit risk managers are loan operations specialists executing the standards set for ideal borrowers. The traditional way to collect data requires a lot of paperwork and is time-consuming, not to mention that there is a chance for documents to be outdated. Here is why the Banko Sentral ng Pilipinas is pushing alternative data. Using Alternative Data for Credit Scoring By combining alternative data with traditional practices, lenders can have a broader and more comprehensive view of a borrower’s ability and willingness to pay. - Telecommunication data is one kind of alternative data that multiple lending companies are utilizing. They require borrowers to give their phone numbers when signing up and applying for online loans. The goal of using telecommunication data for credit scoring is to include the unbanked and underbanked population. With the new Mobile Number Portability Act (MNPA) or RA 11202, Filipinos can keep their number regardless of changing couriers and keep all their telco data for lenders. The MNPA is most beneficial to lending companies because they can refer to a borrower’s “texting usage, data usage, voice usage, top-up patterns, and SIM age” when assessing loan applications. Another widely used alternative data source is device data and web behavior. Because loans are now accessible through OLAs or online lending applications, more and more smartphone users are able to apply for and receive loans. Using device data and web behavior is an opportunity to cover people with low financial credit literacy because they might not have the usual documents for loan applications. Bank data can also be used as alternative data for credit scoring. It should reflect in their financial transaction behavior that they are a good-paying borrower. Bank data can refer to bank statements, account balance, borrower’s income, and spending behavior. This alternative source directly indicates a borrower’s capacity to handle money, which can help lenders predict their attitude once a loan is approved. But why is it not enough? Alternative data sounds too good to be true, and it just might be. Like any other thing, there are limitations to using alternative data for credit scoring and risk assessment. - Telecommunication data, despite its convenience, may be inconsistent with the results it produces. As texting and data usage behavior changes or fluctuates over time, it is hard to use this as a reference for a user’s borrowing behavior. The shortcomings of this alternative data source do not mean that it is

We are happy to share that Smile continues to grow its customer base as it lives by the faith that one's employment and income data should be a basic right -- much like the legal doctrine of "beneficial use" or the right to use one's property in any lawful manner to gain a profit, advantage, or enjoyment from it. In our press event held a couple of days ago, we announced that among the latest Filipino companies to have joined our portfolio of customers are B2B logistics provider TaranaPH and fintech startup Plentina. Prior to them, we had linked with over 30 employment platforms, covering majority of gig workers in the Philippines, including several others in Indonesia. The new business customers were convinced to use our Application Programming Interface (API) technology as it connects people's  employment and income data to financial services easily and hassle-free. Plentina as an app-based Buy-Now-Pay-Later service, lauded our ability to deliver data even for the unbanked and underserved. "Fifteen percent of our current customers can be served by its platform. As we develop both our technologies, we can see a chance of that percentage growing higher and higher over time. Smile API will allow us to unlock more than 90% of the Philippines’ labor force based on their scope and coverage," said Plentina Product Manager Ashley Uy. "With Smile API, we project an improvement of around 12% in our approval rates, with the partnership moving forward," Ashley added. Our latest announcement of customers also highlighted our flexibility in industry or worker coverage. Catering almost entirely to fintech-related use cases, we are also able to add value in the logistics B2B space with Tarana PH. Tarana PH COO Analyn Quizon, said our API platform will help their company to reduce recruitment processing time. They will use Smile's services to quickly expand their delivery fleet to meet customers’ growing demands. "Prior to Smile API, 20,000 applications used to take weeks to process but it can now be done in a matter of seconds. With Smile, we are now smiling," Analyn quipped. Analyn also shared they were looking forward in working with us to onboard Tarana's merchants and partners to its API including the integration of their company's two other platforms the fulfillment platform TupadPH and e-commerce platform BayanihanPH. Finance Data Pipeline Our CEO Jerome Eger clarified that in contrast to a data processing company, we are an information infrastructure with our API network serving as a pipeline or bridge that solves the gap between the public and financial institutions specifically on accessibility of employment and income data. By making employment data history in API format available, we are able to help fintech companies to develop and offer lending and credit products to the marginalized sector, mostly the unbanked, which the Bangko Sentral ng Pilipinas disclosed represents 41 million or 53% of the country's population. Smile's business model is the company's humble contribution in addressing the country's need for innovations within the Open Finance framework, a modern system in the field of financial services that allows for the application of a more holistic approach in improving financial inclusion since it deals with finance data as a whole and not just bank data. Jerome pointed out that we are able to empower workers by practicing the same principle of Open Finance, and t

Within the financial sector, government rules and regulations tend to be strict. These laws protect both BSFIs and clients to keep the Philippine financial industry engine running. As part of the FinTech industry, Smile API helps lenders be compliant with PH government regulations such as the Anti-Money Laundering Act (AMLA), Know-Your-Customer (KYC), and the Data Privacy Act of 2012. First, we believe that compliance should not be tedious Loan applications may be time-consuming, tedious, and inconvenient for both the consumer and the lender side. The number of documents requested from borrowers would rather have them borrow money from their relatives, though this is not feasible in the long run. Going to and from banks can also be a hassle for employees. Aside from this, requesting paperwork from the HR department and government offices can also take time out of their daily schedules. All these concerns from borrowers' are valid, but lenders also face problems processing the verification of such documents given the need to double-check (or even triple-check!) the borrower’s Certificate of Employment, their pay slip, and even their IDs. Lenders must verify multiple clients daily, from their identities to employment data assessment. Otherwise, they would have a possible credit risk if they fail to confirm if these borrowers are fully capable of meeting their obligations after the contract. With this, lenders would agree that they are most affected by the tediousness of loan application processing. The longer it would take for them to assess applications, the fewer loan originations they can get. Without the right resources, they could be at a more significant disadvantage. With Smile API, lenders can avoid these problems with one click. Our one-click employment and identity verification API allows you to be compliant with efficiency in mind With just one user-authorized click, Smile API can give lenders access to the borrower’s verified and most recent employment data. Through Smile API, lenders can save time and verify borrower income data for faster loan approvals. This, in turn, can help lenders process more applications in one day (or even in seconds!) compared to the limited number they process without Smile. - Our service ensures lenders’ compliance with PH regulations Data Privacy Act of 2012 Smile API only processes user-authenticated data. In this way, the users can control which institutions they will share their employment data with. In fact, Smile API only serves as a “bridge” between borrowers and lenders and it does not see the data uploaded by users. Anti-Money Laundering Act Smile API provides data straight from government and employment sources, like SSS, BIR, GSIS, and multiple HR systems. We allow banks, lending companies, and other financial institutions to verify users' source of funds in compliance with the Anti-Money Laundering Act. KYC (Know-Your-Customer) The Know-Your-Customer (KYC) process is an essential part of loan origination. By providing identity data directly from the source, it will be easier for lenders to confirm that their applicants are legitimate and real. Smile API is a “compliance-ready” bridge between lenders and borrowers Smile API's goal has always been to offer an alternative solution to a never-ending problem, and we want to do this right. Complying with laws is just an essential requirement, but we know that it's important,

- MANILA, Philippines (June 9, 2022) -- Smile API, the leading information infrastructure startup company in the Philippines focused on employment and finance data, has once again raised significant funding concluded by its new investor Afore Capital, a $300 million US-based venture firm focused on pre-seed startup investing. It was the second seed round for Smile since its founding in April of last year with CreditEase, and Plug and Play as investors. Figures of the latest pre-Series A round is not disclosed. Anamitra Banerji, Managing Partner at Afore Capital, said they invested in Smile because of the progress the startup has made in a short span of time pertaining to its Application Programming Interface (API), a first of its kind digital platform in the Asia Pacific (APAC) Region that enables wider financial inclusion by serving as a bridge between the public and financial institutions in terms of finance data or source of income data. Smile's major focus at present is on employment data of casual employees, freelancers including gig workers. Banerji pointed out that one of the main challenges in the local market in Southeast Asia is data, like banking and finance data, which lenders require lendees to provide before making credit decisions. Smile bridges this gap by enabling people to get and make use of their employment data. "Financial inclusion is the first step in being fully open to all the possibilities that life has to offer. You have to have financial security and must take risks. But you can't take risks because no one is willing to lend you," Banerji noted. Besides employment data, Smile's digital platform also allows e-wallets, loans, insurances, digital bank accounts and many more applications to become available through a simple but clear white labeled interface within the client application using the Smile API infrastructure, all while keeping the end user in full control of what data is shared and with whom. The Afore executive shared they are excited to work with Smile API because of the opportunity that it offers to a lot of Filipinos and folks across Southeast Asia. "Smile API really empowers a lot of developers, fintech, Insurtech and a whole host of other services that are oriented towards financial inclusion. But providing employment data history in API format makes it very easy for Fintechs to build around and ultimately offer lending and credit products," Banerji added. Smile API CEO Jerome Eger, along with Smile Chief Product Officer Jan Alvin Pabellon, likewise announced the company has expanded its coverage to 40 million Filipinos -- basically anyone who is employed whether they are a gig worker or salaried employee. Smile's two new customers include local B2B logistics provider Tarana.ph, and fintech startup Plentina. Smile Employee Survey Smile also announced a partnership with Tahanang Walang Hagdanan, Inc. (TWHI), where it will donate Php50 for every answered survey. TWHI is a non-stock, non-government organization, providing services to persons with disabilities (PWD). The survey can be found at https://getsmileapi.com/employee-survey About Us Smile Technology Pte Ltd is one trusted source for employment data in Asia. Smile provides user-authorized access to valuable employment and income data from HR, payroll, commerce, and marketplace platforms through a single API. Banks, fintechs, recruitment agencies, and other service providers