Just what we all need: A robot to rate our credit scores
Artificial intelligence will scan applicants' social media profiles and other data, says fintech boffin Synthesis
Capital Appreciation’s fintech software division, Synthesis, is piloting an artificial intelligence (AI) powered credit scoring system that scans applicants’ social media profiles and other data.
In an effort to make credit scoring more accurate, some lenders in other markets are already using this technology, including Capitec’s European associate, Creamfinance. Capitec has said in the past it would look to adopt some of the online lender’s credit scoring tools.
Synthesis’s research and development unit began piloting the software with a local financial institution about five months ago, says Synthesis MD Michael Shapiro.“It’s early days, they’ve done a soft launch and are moving towards a bigger launch.”
Shapiro said the credit scoring system used traditional credit bureau data as well as applicants’ social media and other online activity.
“We also use other information that’s provided from different sources, and then the machine learning determines the credit risk. Oftentimes they’ve found that they’ve started granting credit in areas where the traditional model would have said ‘no’, and vice versa. It’s just really an extension of what these credit institutions have been doing for years,” Shapiro said.
Meanwhile, Shapiro said Synthesis was also piloting a blockchain solution with local financial institutions. Similar to the Internet in the early 1990s, “banks and other financial institutions are seeing how [blockchain] can be used most effectively in their operations”, he said.
“Financial institutions are highly regulated and have a responsibility to remain compliant, and they’re not going to be taking undue risks, but at the same time they’re seeing the opportunity to utilise this in a way that can benefit their customers and how they operate.”
Synthesis, which does cloud consulting services for Amazon Web Services, generates about 20% of Capital Appreciation’s revenues.