Traditional credit scores create a gap that Lenddo addresses

By GovernanceToday
In Interview
May 4, 2016
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Capturing one’s creditworthiness has traditionally been confined to tracking financial activities of an individual, but that has changed now as Lenddo, the world’s leader in using non-traditional data for credit scoring has launched its entire suite of solutions for India. The company has already been providing lenders in India alternative credit scoring solutions to improve financial inclusion in the Indian market. It has now opened its complete range of solutions including Identity Verification Modules, an Origination System Module and a Marketing Insights Module combined with Custom Scorecard Development services to the Indian market. In a conversation with Lekshmi Parameswaran of Governance Today, Richard Eldridge, Co-Founder & CEO of Lenddo describes the company’s solutions. Edited excerpts:

Lenddo

Richard Eldridge | Co-Founder & CEO, Lenddo

Could you tell us about Lenddo & its innovative technology

Lenddo is the world’s leader in using non-traditional data for credit scoring and online verification. We have built proprietary technology that enables us to collect, store, analyze and process billions of data points from multiple data sources quickly and efficiently. This includes Social, Mobile, Psychometric, Telecom, Form Filling Analytics & Transactional Data from E-Commerce Firms, Payment Gateways and Wallets etc.

Our Data Science team, which includes PhD’s based in New York, use this data in combination with over 4 years of lending experience, and advanced machine learning techniques to build our highly predictive algorithms.

We offer our credit scoring, verification, marketing insights services, decision and custom scorecard solutions to banks, lending institutions, telecom and credit card companies worldwide and facilitate over 100,000 credit decisions a month for customers who typically would have been denied due to lack of credit history.

What is LenddoScore? How is it calculated?

The score is a numerical value which measures the customer’s potential credit risk at the time of application –a higher LenddoScore indicates better creditworthiness i.e. lower predicted default. It is a powerful predictor of a customer’s character or willingness to make payments and as it is based exclusively on non-traditional data. The formula is Lenddo’s Intellectual Property and is tested and monitored regularly by the Lenddo’s Data Science and credit risk teams.

How is it different from other credit scoring agencies, like CIBIL in India?

Traditional scores like the one provided in by CIBIL, mainly use previous financial history to assess creditworthiness. This creates a gap whereby individuals, who do not have credit history, may have limited access to credit. Lenddo is addressing this gap by expanding the scope of variables using non-traditional data sources, such as those from online behavior, mobile devices and social data. When building a credit model, Lenddo uses up to 12,000 data points, from which our team of data scientists create predictive features using advanced data modeling techniques.

What is Lenddo’s Verification like?

Lenddo’s Verification solution uses Social, Mobile and other types of non-traditional data to authenticate the information that an applicant or user provides. We have also developed an enhanced Verification solution that allows as applicant or user to take and upload images, take a selfie, affix a digital signature and submit this information real time and online through a mobile app.

How important is India as a market for Lenddo?

With India’s emerging middle class expected to grow to over 500 million by 2021 and growing usage of smartphones and the internet, Lenddo’s products and services will augment the drive for Financial Inclusion by bringing in millions in the mainstream financial service market, support digitization of credit processes and verifications to enable faster, cheaper and informed decision making. Because of its size and latent opportunity, India is an important market for us.