microdecision making in financial services - greg lamp @ papis connect

Microdecision Making in Finance Services

Greg Lamp

Me

Greg Lamp- Founder/CTO of Yhat- github.com/glamp

Here I am on the Internet.

Hi I’m Greg!

Agenda- Intro- FinTech basics- Alternative Lending- 2 Case Studies: Ferratum & VIA SMS- Q & A

FinTech

Consumer & SMB Lending

Wealth Management

Investing & Trading

Credit & Reporting

Financial Literacy

Mortgages

Consumer & SMB Lending

Wealth Management

Investing & Trading

Credit & Reporting

Financial Literacy

Mortgages

Alternative Lenders

Banks are bad at lending to small entities

Inconsistent data on Small

Business / Consumers

Banks are bad at lending to small entities

Lots of due diligence for

small amount of capital

Manualinaccurate risk

difficult to automateexpensive

time consuming

Bad Data

software problem

● Aggregate disparate data sources

● Advanced analytics to decrease risk

● Automate using software

Lending $500 requires the same effort as lending $500,000

Winning Formula

Borrowersseeking < $250K

Borrowers

Acceptable Risk

seeking < $250K

8%-12% loss rate

Borrowers Dataseeking < $250K

8%-12% loss rate

FICO, Social, Survey

Acceptable Risk

Borrowers Dataseeking < $250K

8%-12% loss rate

FICO, Social, Survey

Analyticsadvanced modeling

Acceptable Risk

advanced modeling

Acceptable Risk

Analytics

Borrowers Dataseeking < $250K

8%-12% loss rate

FICO, Social, Survey

SweetSpot

Aggregate data and

use predictive analytics

to automate decisions

Difficult

● Leading small business lender in U.S.

● IPO in 2014● $4 billion in loans● Recently expanded

internationally (Canada, Mexico)

Data Science

Application Developers

Data Science Application Developers

We let you ship analytics fast.

Europethings get a little trickier

742M people$27,500 GDP / capita

50 countriesdifferent regulations, banking

23+ languagesnot everyone speaks English

50 countriesdifferent regulations, banking

50 countriesdifferent regulations, banking

no central credit data

hundreds of credit bureaus

23+ languagesnot everyone speaks English

Case StudyFerratum Bank

- Consumer lender HQ in Finland

- IPO in 2015- Largest mobile bank in EU- 22 countries- 1.5 million customers

7 22countries

15%decrease in loss rates

Case StudyVIA SMS

- 6 countries- €60 million lent annually- Loan size €300 - €700

100K+originations per year

Risk

FraudPricing

Risk

Fraud

Pricing

13%better model performance

Bite-sized decisions leads to better & faster performance

makes it easy to automate decisions

FinTech

FinTech ...and others

Founded in 2013

HQ in NYC

(Mighty) Team of 11

Investors

● FinTech uses technology to beat banks

● Alternative Lending runs on predictive analytics

● Yhat automates decisions

Thanks!greg@yhathq.com