Mastercard and CTOS partner to transform credit risk management

Mastercard and CTOS Malaysia have entered into a strategic collaboration to modernise Malaysia’s credit risk management landscape, combining global best practices with advanced data analytics to improve access to financing for individuals and small businesses.

The partnership is designed to support financial institutions in transforming key aspects of credit underwriting, loan approvals, portfolio growth, and collections. Leveraging CTOS’ extensive credit database and Mastercard’s global expertise in analytics and consulting, the initiative introduces a data-driven approach that enables banks to make more precise, risk-adjusted lending decisions.

Such credit risk transformation services have historically delivered positive results in other markets, increasing approvals for unsecured loans by approximately 5–10% while maintaining targeted risk-adjusted returns. In Malaysia, the collaboration is set to drive similar gains, particularly for underserved segments such as small and medium enterprises (SMEs) and individuals with existing credit histories.

“This collaboration with CTOS is another step forward in Mastercard’s commitment to expanding access to credit,” said Beena Pothen, Country Manager for Malaysia and Brunei at Mastercard. “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.”

Enhancing credit underwriting and risk precision

Globally, approval rates for credit cards and personal loans sourced from open markets typically exceed 40%. However, in Malaysia, the use of private bureau data for credit risk assessments remains limited compared to markets like India and the Philippines. The Mastercard–CTOS partnership aims to bridge this gap by helping banks adopt richer, long-term data and more sophisticated risk models.

Private credit bureaus such as CTOS provide detailed, long-term credit information, performance data, and summarised scorecards that go beyond traditional assessments. When combined with Mastercard’s analytical capabilities and consulting expertise, this data enables financial institutions to better understand consumer behaviour, refine their credit policies, and make informed decisions on loan approvals.

This approach not only enhances approval rates but also helps reduce default risks by identifying early warning signals in borrowers’ repayment patterns. The result is a more resilient lending environment that benefits both financial institutions and borrowers.

“This collaboration represents a meaningful step forward in strengthening Malaysia’s credit ecosystem through advanced data analytics and innovation,” said Kevin Loh, Interim Group CEO of CTOS Digital Berhad. “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.”

Strengthening financial ecosystem

Beyond improving credit approval rates, the collaboration also focuses on enhancing customer engagement and long-term portfolio management. Financial institutions will gain tools to identify growth opportunities among existing customers, improve credit lines, and pursue up-sell or cross-sell strategies — all supported by sound risk management.

Additionally, the initiative aims to optimise collections by allowing banks to detect repayment trends and prioritise customers with higher non-repayment risks. This targeted approach not only strengthens banks’ operational efficiency but also helps sustain profitability in a competitive lending environment.

In the long run, the Mastercard–CTOS partnership is expected to accelerate the adoption of private credit bureau data in Malaysia, bringing the local financial ecosystem closer to global standards. By integrating innovation, data intelligence, and inclusive finance principles, the initiative reinforces Malaysia’s commitment to building a stronger, more inclusive, and digitally advanced credit landscape.