microdecision making in financial services - greg lamp @ papis connect
TRANSCRIPT
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
