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Microdecision Making in Finance Services
Greg Lamp
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Me
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Greg Lamp- Founder/CTO of Yhat- github.com/glamp
Here I am on the Internet.
Hi I’m Greg!
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Agenda- Intro- FinTech basics- Alternative Lending- 2 Case Studies: Ferratum & VIA SMS- Q & A
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FinTech
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Consumer & SMB Lending
Wealth Management
Investing & Trading
Credit & Reporting
Financial Literacy
Mortgages
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Consumer & SMB Lending
Wealth Management
Investing & Trading
Credit & Reporting
Financial Literacy
Mortgages
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Alternative Lenders
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Banks are bad at lending to small entities
Inconsistent data on Small
Business / Consumers
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Banks are bad at lending to small entities
Lots of due diligence for
small amount of capital
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Manualinaccurate risk
difficult to automateexpensive
time consuming
Bad Data
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software problem
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● Aggregate disparate data sources
● Advanced analytics to decrease risk
● Automate using software
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Lending $500 requires the same effort as lending $500,000
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Winning Formula
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Borrowersseeking < $250K
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Borrowers
Acceptable Risk
seeking < $250K
8%-12% loss rate
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Borrowers Dataseeking < $250K
8%-12% loss rate
FICO, Social, Survey
Acceptable Risk
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Borrowers Dataseeking < $250K
8%-12% loss rate
FICO, Social, Survey
Analyticsadvanced modeling
Acceptable Risk
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advanced modeling
Acceptable Risk
Analytics
Borrowers Dataseeking < $250K
8%-12% loss rate
FICO, Social, Survey
SweetSpot
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Aggregate data and
use predictive analytics
to automate decisions
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Difficult
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● Leading small business lender in U.S.
● IPO in 2014● $4 billion in loans● Recently expanded
internationally (Canada, Mexico)
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Data Science
Application Developers
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Data Science Application Developers
We let you ship analytics fast.
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Europethings get a little trickier
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742M people$27,500 GDP / capita
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50 countriesdifferent regulations, banking
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23+ languagesnot everyone speaks English
50 countriesdifferent regulations, banking
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50 countriesdifferent regulations, banking
no central credit data
hundreds of credit bureaus
23+ languagesnot everyone speaks English
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Case StudyFerratum Bank
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- Consumer lender HQ in Finland
- IPO in 2015- Largest mobile bank in EU- 22 countries- 1.5 million customers
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7 22countries
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15%decrease in loss rates
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Case StudyVIA SMS
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- 6 countries- €60 million lent annually- Loan size €300 - €700
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100K+originations per year
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Risk
FraudPricing
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Risk
Fraud
Pricing
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13%better model performance
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Bite-sized decisions leads to better & faster performance
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makes it easy to automate decisions
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FinTech
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FinTech ...and others
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Founded in 2013
HQ in NYC
(Mighty) Team of 11
Investors
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● FinTech uses technology to beat banks
● Alternative Lending runs on predictive analytics
● Yhat automates decisions