Mastercard and CTOS Collaborate to Expand Credit Access and Improve Risk Management

Enhanced credit risk consulting services provides financial institutions with richer data insights to improve decision-making on loan approvals, reduce default rates and optimize profitability  

Mastercard and CTOS Malaysia have announced a strategic collaboration to provide credit risk transformation services, addressing credit underwriting and loan approvals, portfolio growth and collections. The services for financial institutions are expected to bring global best practices in credit risk management for individuals and SMEs to Malaysia – such services in the past have delivered an increase in approvals for unsecured loans of approximately 5-10% while achieving risk-adjusted-return targets.  

The initiative increases access to financing for small businesses and individuals with an existing credit history. This is achieved by combining CTOS’ database of longer-term customer credit information and existing scorecards, with Mastercard’s global expertise, comprehensive data analytics and advanced consulting capabilities.

Beena Pothen, Country Manager, Malaysia and Brunei, Mastercard said, “This collaboration with CTOS is another step forward in Mastercard’s commitment to expanding access to credit. With 48% of SMEs in Malaysia still unserved or underserved, this collaboration directly addresses a gap and supports the growth of small businesses and entrepreneurs, who represent 96.1% of all enterprises in Malaysia as of 2024. By increasing access to credit, it aligns directly with the national level agenda through the 13th Malaysia Plan to build a resilient, high-income, and inclusive nation.”

Global approval rates for credit cards and personal loans from open-market sourcing are typically upwards of 40%. A key factor in improving these rates in Malaysia is the utilization of credit information from private bureaus, where annual exercises for improved risk management with private bureaus, compared to markets such as India and the Philippines, are far less common.

Private bureaus, such as CTOS, provide data across a longer period, summarised scorecards and performance data on rejected customers at a group level. Combined with Mastercard’s expertise in analyzing the rich data set and turning them into actionable insights for banks through its advanced consulting capabilities, this collaboration transforms credit underwriting policies and enables banks to make better informed lending decisions. This enhanced data-driven approach not only increases loan approval rates, but also reduces default rates and optimizes portfolio growth for banks, while increasing access to credit for small businesses and individuals who were historically rejected based on former loan assessment models and limited data sets.

Kevin Loh, IGCEO of CTOS Digital Berhad, said, “This collaboration represents a meaningful step forward in strengthening Malaysia’s credit ecosystem through advanced data analytics and innovation. By pairing CTOS’s depth of local credit data, governed under the Credit Reporting Agencies Act, with Mastercard’s global expertise, we are enabling financial institutions to assess risk with greater precision and confidence. The result is a more inclusive and resilient credit environment, one that promotes wider access to financing while upholding the highest standards of governance and data integrity.”

Beyond this, the collaboration will also enable financial institutions to better explore growth opportunities with existing customers – such as improving credit lines, pursuing up-sell or cross-sell strategies – supported by prudent risk management. This drives profitability for banks while enhancing engagement and experience for small businesses and individuals who were previously excluded from such services. It also aims to address collections by enabling banks to more effectively assess repayment trends and prioritize customers with high likelihood of non-repayment. In the longer term, such initiatives will increase the adoption of private credit bureau data, modernize and strengthen Malaysia’s financial ecosystem, and drive inclusive growth across the country.