What is the situation in Ecuador?
- SEPS is the financial authority responsible for the prudential and market conduct supervision of credit cooperatives and other non-bank financial institutions.
- SEPS’ responsibilities include responding to consumer queries, claims and complaints and undertaking financial education interventions. There is a high demand for such services.
- SEPS oversees over 16,000 institutions and their interactions with over 5 million customers and members, with a large proportion of these living in rural areas or with low education levels.
- People submit queries and complaints through different channels: e-mails (19%), call centres (26%), in-person (18%), and video calls and online chats (38%).
- In 2021 alone, SEPS responded to and resolved around 221,000 cases. The queries and complaints, and resulting data collected through these channels, are largely processed manually and, even for electronic channels, is not integrated into existing databases due to infrastructure and technological constraints.
- Information from individual complaints could provide early warning of financial institutions’ problematic conduct or systemic issues developing in the sector.
The Cambridge SupTech Lab and World Bank value proposition:
- The project will directly benefit consumers and members by providing an efficient mechanism to formulate and receive responses to queries and financial education-related questions to adequately channel consumer complaints and support more effective supervision for their benefit.
- Institutions will also benefit from more appropriately targeted supervision and better information policymaking based on better data capture and analysis.
- To facilitate this, the chatbot would use elements such as natural language processing (NPL) and machine learning, as determined appropriate during development.
- Implementing a chatbot-based solution would help SEPS provide uninterrupted services 24/7/365.
- The proposed chatbot and analytic tools will improve SEPS’ supervisory capacity by providing additional data sources that could be merged with other existing data sources (such as the electronic registration process and portal for institutions).
- Potential solutions and app implementation:
- The gender gap in accessing credit is significant.
- From research, we observed that women prefer using online chat compared to other channels to submit queries and complaints.
- More information provided through the chatbot and adequate channels (digital) for women can help them improve their trust in these institutions and access.
- A higher level of formalisation of supervised institutions can help them to participate more effectively in the formal economy:
- 23% of the queries are related to the Board of Directors’ registration, registration of their members or the registration process of the institution itself.
- These processes to formalise governance mechanisms are also requirements to participate in economic activities, such as public procurement processes, thus indirectly contributing to creating jobs.
- In addition to supporting the design and development of the pilot suptech solution, the Ecuador project will support the procurement process for the hardware and software licensing/acquisition.