Different countries have very different credit reporting systems, which means that lenders may struggle with the underwriting necessary to approve immigrants for credit cards, loans, or other bank services. Nova Credit’s software integrates and standardizes international credit data, which ultimately reduces the effort and cost for lenders to serve these customers.
HSBC is working with Nova Credit to better provide services to immigrant customers.
The fintech makes credit history from one country usable in another, and HSBC is currently deploying the service in its Singapore unit to help it serve people who have a credit history from India. HSBC has historically assessed immigrants’ creditworthiness by requesting documents, but Nova Credit’s system makes it easier, faster, and ultimately cheaper to serve this population.
Helping the under-banked get access to loans is a boon to both society and banks’ bottom lines: Immigrants are HSBC’s “fastest growing” and “most commercially attractive” customer segment, it told American Banker. It plans to expand its use of Nova Credit’s service to include new geographies and invested $10 million in the firm through its venture arm. “The potential for the reach of this partnership is monumental,” a Nova Credit spokesperson told Insights Distilled.
The relationship between HSBC and Nova Credit has been in the works since before the pandemic, the spokesperson said, and other partnerships could emerge in the future: “Global demographics continue to show that immigration is the main driver of population growth in developed economies. As other global banks take a stance behind this shift and realize the importance of the immigrant population, we are open to explore those relationships.”