SCALABLE PSYCHOMETRIC CREDIT SCORE SOLUTION POWERED BY MACHINE LEARNING PLATFORM
AdviceRobo is an international credit scoring company applying psychometrics and Artificial Intelligence to support lending to millennials & SMEs. AdviceRobo provides a highly scalable psychometric credit score solution powered by a Machine Learning platform. The secret sauce is in its deep scientific knowledge on and experience with psychographics applied in scoring models.
Around 2 billion people – 40% of the world’s adults - don’t use formal financial services, states the UN Secretary-General’s Special Advocate for Inclusive Finance for Development. The World Bank says more than 50% of adults in the poorest households are unbanked. These people do not have access to appropriate and affordable financial services. Not only households, but also businesses, especially Small and medium enterprises (SMEs), still struggle to obtain financing that meets their needs. Financial inclusion is key to empower people to build and live their lives.
Poor credit information
Part of this issue is the lack of reliable credit information. Worldwide, only 30% of adults are listed in a private credit registry with information on repayment history, unpaid debts or credit outstanding. This makes it hard for a bank to assess the risk and creditworthiness of a new customer and therefore often results in rejecting the application for credit.
New technology as an answer
New digital technologies are making it cheaper and easier than ever before to extend access to financial services to the 2 billion worldwide. Technology can and will make the difference the upcoming years to achieve financial inclusion. Data, Artificial Intelligence (AI) and Machine Learning will all play a role in improving customer’s financial health, and empower them.
To achieve this, AdviceRobo brings a new credit score and risk approach, driven by big data and artificial intelligence. It is not only about the ability to pay back a loan, but also about the ‘willingness’.
Psychometric credit score
Based on motivational insights, AdviceRobo developed an academic proven psychometric credit test to measure creditworthiness of thin-file customer segments where no or little credit information is available. Psychographic credit scoring is the art of assessing a thin-file people’s creditworthiness by:
- Universal risk profiling based on behaviour, attitudes and personality traits;
- Granular individual prescriptive score due to machine learning based scoring model.
In the regular on boarding for a loan, mortgage of credit card, applicants fill out an online interview. AdviceRobo offers a white label plug in to be integrated in the on boarding for a seamless customer experience. Within seconds the lender gets the applicants credit score and a short profile via an API. Based on this, he instantly approves or rejects the applicant. This technology proved to increase acceptance (+18%) at same or better risk levels (up to 38% lower than average default rate).
Include, engage and empower
Psychometric scoring offers an unprecedented opportunity for lenders to help customers build and strengthen their financial health. At the same time, it enables lenders to learn deeply about their customers, understand their needs and intelligently financially include and empower them.
The AdviceRobo solution in short
A simple ‘personality’ test measures one’s creditworthiness. The AdviceRobo test gives insights about one’s capacity to mitigate risks, his or hers understanding of financial concepts such as pension and inflation, and his or hers capacity to manage e.g. repayments. The benefits:
- Improve screening of new applicants;
- Increase acceptance at same or better risk levels, and at low cost;
- Enable lenders to learn deeply about their customers, understand their needs and access to credit;
- Easy to integrate in the customer journey.
Besides the innovative psychographic credit score, AdviceRobo enables lenders to properly predict and prevent credit risks, such as default, bad debt and churn during the customer lifetime. AdviceRobo developed a machine learning platform that accurately predicts consumers' risk behavior by combining structured and unstructured client data.
Founded in 2013, AdviceRobo has a client base comprising (next gen) banks, credit card providers, mortgage IFA’s, micro finance and crowd funding platforms.
Recent partnerships include Microsoft, KPMG, Mambu and Endava. For these, AdviceRobo technology will be used to support credit scoring and predictions of credit risk as default, bad debt and churn.
With offices in Amsterdam and London, the company has operations all over Europe.
AdviceRobo in The FinTech50 2017
AdviceRobo at Lendit 2016
AdviceRobo at Finovate 2016
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