Peppermint Innovation leverages AI to spearhead fintech evolution and expand digital financial services

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By Colin Hay - 
Peppermint Innovation ASX PIL tech mobile banking quarterly result

Fintech specialist Peppermint Innovation (ASX: PIL) is set to further advance a number of key developments it achieved during the December quarter.

In releasing the company’s quarterly report, managing director and chief executive officer Chris Kain said the December reporting period delivered a number of key milestones for Peppermint including the strategic acquisition of XPON’s artificial intelligence (AI) & customer experience (CX) business division and live testing of MASS-SPECC’s Pinoy Coop program in the Google Play app.

Mr Kain said the acquisition of the Xpon Digital division was a major boost for the company with the potential to accelerate revenue growth in a short space of time.

“The AI & CX team has been instrumental in leading significant transformations and integrating advanced AI capabilities into various renowned businesses in the UK such as Informa, Amnesty International and Elementary Logix,” he said.

“By acquiring this established and proven team, Peppermint is effectively leapfrogging years of development in building similar capabilities, methodologies, frameworks and outputs from scratch to focus on the company’s business going forward.”

Mr Kain said Peppermint will be integrating the AI & CX team into its existing technology operations over the coming 6-12 months, enhancing the company’s technological delivery capabilities while allowing the company to assess cost optimisation and specialisation across its technology teams.

“This will also enable us to accelerate our AI transformation across our bizmoloan operations, especially in the areas of loan origination, credit scoring and management and collections, to deliver on our vision to become a leading automated lending business to the financially underserved.”

Looming ‘super cycle’

Experts are forecasting the global economy is moving into a new “super cycle” with AI and decarbonisation being two significant driving factors.

According to research published in August 2023 by Statista Market Insights, the global market share of AI services in 2023 was around $365 billion, increasing to approximately $462b in 2024.

In 2023, the AI market share in the UK alone was around $15b.

Mr Kain said digital payments and the digital economy are expected to soar during 2024 in the Philippines, the company’s main market location, as the country benefits from the increasing adoption of e-commerce, mobile payments and contactless payments, as well as the supportive regulatory environment and initiatives by the Bangko Sentral ng Pilipinas.

Peppermint Intelligence upside

Peppermint made a strategic decision when it acquired the established and proven ‘Application Modernisation’ business division of XPON Technologies’ wholly-owned subsidiaries Xpon Digital (now called Peppermint Intelligence Limited – PINT) and Holoscribe Australia (now called Peppermint Intelligence Pty Ltd – PIPL) in late 2023.

The acquisition was aimed at helping Peppermint pursue strategic mergers and acquisitions to support the company’s established electronic money issuer (EMI)-licensed technology platform and loan book operations in the Philippines.

During December 2023, Peppermint Intelligence secured contracts worth around $365,000 and forecast an additional sales pipeline of approximately $1m for CY24.

MASS-SPECC agreement

The recent MASS-SPECC Cooperative Development Centre partnership achieved a major milestone in early December with the commencement of ‘live’ testing of MASS-SPECC’s Pinoy Coop application in the Google App store.

This came just months after Peppermint signed a strategic 5-year partnership agreement with MASS-SPECC to deliver end-to-end services for the app via white-labelling the company’s EMI wallet and mobile banking application.

Various technical enhancements are now being implemented to fine-tune the app while beta testing continued during January 2024.

During the March 2024 quarter, Peppermint will continue to onboard additional experienced mobile users who are expected to register high utilisation rates.

Bizmoloan operations boost

Peppermint continued to refine and improve its loan book operations during the December quarter, leading to a 23% increase in gross revenue for the period.

Notably, the improved financial result for Q4 2023 was achieved on fewer loans being issued due to the streamlining of bizmoloan operations and application of tighter borrowing criteria.

Peppermint believes its new AI and CX capabilities will help develop and deploy additional enhancements that will further improve the bizmoloan operations and potentially achieve higher profitability.

The company is now targeting repeat borrowers in the micro-business loan category, predominantly Sari-Sari store owners who secure loans to operate and grow their stores utilising the bizmoto platform.