Tam Finans CIO Seyit Ertuğrul emphasized that the new digital world necessitates new mindsets, saying, “Now, those who equip their companies with digital products and solutions will be able to carry on, but those who create sharing economy, decentralized structure, and ecosystems through collaborations will be able to carry on.”
Tam Finans, founded nine years ago, stands out as one of the sector’s most major players, with 38 outlets in 25 different cities, 10 mobile teams, and over 600 employees, 400 of whom work in the field. We spoke with Seyit Ertuğrul, CIO of Tam Finans, which has an asset size of TL 1.2 billion, about the company’s technological competencies, as well as the future of financial technologies…
Why do you have such a massive technology unit in factoring companies?
We can only perform one transaction with 30% of our consumers right now. We have become a clear leader in the number of clients by touching more businesses than any other company has touched, doing business with 110 thousand companies in a short period of 8 years, thanks to the force of our field staff in the sector. As a result, even in crisis situations, we were able to keep our net credit risk at 1%. While achieving this large volume of consumers and transactions, our top objective has been to appropriately analyze credit risk, perform operations swiftly, and ensure data security. This structure is supported by a serious technological infrastructure.
Tam Finans has built its own R&D department to build these structures in the most efficient and effective manner possible. We utilise all of the technology that our firm requires, and by doing so, we generate value-added goods and services that allow us to return to our clients faster. Our company’s manner of doing business and even its organizational structure are determined by the products and services we develop. We choose to construct and manage all of these structures internally in order to ensure that the structures that will support our company’s growth pace are developed swiftly and in accordance with the needs, as well as to keep knowledge and experience within the company.
How does TamFinans use technology and especially artificial intelligence?
We actively employ artificial intelligence and machine learning approaches, particularly in customer acquisition, credit decisions, credit monitoring, gaining access to the appropriate consumer at the right time, and fraud detection. While doing so, the decision is not made solely by artificial intelligence, but in collaboration with the infrastructure that allows us to incorporate the experiences of business units into our systems. We discovered via trial and error that this hybrid structure yields the most accurate results.
We can see ahead and manage risk using our analytical credit decision and monitoring infrastructure, which we created at the Tam Finans R&D Center. We conduct inquiries and assign ratings to more than 1000 factors using the credit score card we created. We decide if we will receive the invoice and check that is the subject of the financing in this manner, and we also make a risk-based price offer based on the score. As a result, we do one transaction per minute, and we meet and analyze 75 percent of these transactions without the need of a human being.
We provide our customers the chance to enquire about the availability of invoices and checks for financing, free of charge, 24/7, through our Full Finance Mobile application, which is also a first in our industry. Furthermore, with the mobile application we provide to our 400 field personnel, we enable our field team to track their check inquiry, portfolio, transactions, and processes from wherever they are. These technologies also help our outstanding crew in the field. We employ Process Management Software, which we are building in our R&D Center, to ensure the automation of the necessary procedures and to construct auxiliary apps to ensure the transactions are completed as rapidly as possible. We also establish smart job assignments to field and operations teams using this structure.
Do you collaborate with fintech companies?
We perceive ourselves as both a Fintech company and a financial institution. In 2017, we were named one of the world’s 100 most effective technological organizations; nevertheless, we are a corporation that does much more than merely employ technology. Furthermore, the technology we create influence how our company operates and even its organizational structure.
We may share our analytical credit decision and monitoring infrastructure established in the R&D center as a service with Fintech firms thanks to the factoring API we developed. In this regard, we have created a new application in collaboration with a key participant in the Fintech business, such as eLogo. With the use of this application, Logo users will be able to access Tam Finans from their accounting and ERP solutions without having to visit our branches and make factoring applications. We are in discussions with several Fintech firms. By producing such value-added products and services, we will continue to give full-time support to our tradespeople and SMEs in the foreseeable period.
Will there be new business potential for factoring companies as a result of Open Banking in the near future?
New mindsets are required for the new digital environment. Those who develop shared economies, decentralized structures, and collaborative ecosystems will be able to move forward, rather than those who outfit their businesses with digital products and solutions. It is critical to evaluate all activities done in terms of the benefit to the consumer and to build solutions for the demands. It is critical to conduct research on potential legal regulation scenarios and to plan accordingly.
Prior to the Open Banking regulation, banks began to take the initial steps toward Open Banking by making their APIs public. We anticipate that by integrating some banking services into our own business models, we will be able to provide a better client experience and develop new goods and services. In addition to digital transactions and remote customer acquisition, we can assert that our access to payment, collection, and virtual POS services, together with open banking, will enable the digitalization of the customer process from beginning to end.
How do you rate Turkey’s fintech ecosystem in general? Can we compete with the rapidly developing sector in other countries?
Only financial technology come to mind when people think of fintech. Indeed, the term Fintech refers to the mix of technology and novel business models that will make the financial services industry more accessible and user-friendly.
When we say ecosystem, we mean a structure formed by new technologies and tools, telecommunications and technology businesses, social media and internet platforms, startups, financial institutions, financial infrastructure providers, legislators, and investors. All of these actors rely on one another to function. The ecosystem’s power is derived from the interaction of these actors.
Despite the fact that Turkey came to this issue late from abroad, we can see that the Fintech ecosystem has grown rapidly in recent years, and investments in this field are increasing. Despite this, the relatively new sector of financial technologies has yet to mature. This issue also demonstrates Fintech’s strong potential in Turkey. Turkey has the potential to become a regional financial technology center in the future if it exploits its geopolitical advantage.
