Behavioral credit scoring solution gives businesses an alternative score for approving “thin file” customers
SINGAPORE, Sept. 9, 2020 – CredoLab, a leading developer of bank-grade digital credit scorecards based on smartphone metadata, has secured US $7 million in its Series A funding round led by GBG, the global specialist in Identity Data Intelligence. The funding will enable CredoLab to focus on consolidating its leadership in Southeast Asia and to expand its market reach in the United States and key countries across Asia, Latin America, and Africa.
In addition to GBG, the round saw participation from Walden International, an existing investor, and Access VC among other new investors.
CredoLab develops bank-grade digital scorecards for banks, lenders, ecommerce, travel, ride hailing, e-wallets, insurance and retail companies, essentially any business that needs to make better credit decisions. CredoLab uses the best source of privacy-consented and permissioned data –smartphone and web metadata– to help its clients to expand their market share and decrease their cost of risk in real time. Since its inception in 2016, CredoLab has powered almost US $2 billion in loans issued by 70+ clients across 20+ countries.
“Despite the obvious slowdown caused by COVID-19, we have already seen a significant shift from physical to digital originations and an increased appetite for using alternative sources of data,” said Peter Barcak, CEO and Founder of CredoLab. “CredoLab has continued to provide a stable behavioral score that has kept its predictive power even as payment holidays have made it harder for lenders to rely on credit bureau scores. We have become an essential part of the recovery strategies of our clients as they restart lending in the post-COVID-19 environment in a risk-controlled way.”
With the objective of democratizing credit scoring, CredoLab plans to use this funding to further enhance its product features and expand the understanding of customers’ digital risk DNA. In the US, more than 27% of the population either has no or so little credit history that they are considered “unscorable” by traditional credit bureaus (so-called “thin file” consumers). CredoLab provides a solution for businesses to evaluate and approve customers whose creditworthiness might not otherwise be easily ascertained. This is increasingly important as more commerce and banking has moved online and to mobile in the post-pandemic economy.
In addition to strengthening its alternative credit core scoring algorithm, CredoScore, the Singapore-based FinTech company will also push the adoption of its solutions in other industries at the intersection with financial services and help them grow faster. For instance, the pandemic has highlighted the problem of lower-income unbanked or underbanked consumers in the US, who find it hard to do basic things like open savings accounts or deposit checks. The company has previously announced a partnership with US-based iovation, a TransUnion company.
Chris Clark, Chief Executive, GBG said: “GBG’s fraud and compliance solution allows financial institutions to onboard and transact with their customers quickly, safely, and securely. We have experienced first-hand CredoLab’s capabilities from our ongoing commercial partnership. The company’s AI-based proprietary technology will complement our existing offering but also provide critical behavioural risk reference data from good customers that are financially excluded.”
CredoLab develops bank-grade digital scorecards for banks, lenders, pay later, e-commerce and ride-hailing players, and any other industry at the intersection of financial services. Built on over 22 million loan applicants across 70+ lending partners, our AI-based algorithm crunches millions of features from opt-in, anonymous smartphone and web behavioural metadata to find the most predictive behavioural patterns before converting them into credit scores. These enable any lender to make the most granular assessments possible of their applicants. Our clients have seen 20% higher new to bank customer approvals, a 15% reduction in non-performing loans, and a 22% dip in fraud rate.
Established in Singapore in 2016, CredoLab has powered almost USD 2 Billion in loans issued after analyzing about 1 trillion data points across 20+ countries. We are backed by GBG, Walden International, Access Venture Capital, Fintonia Group and FORUM.
GBG offers a range of solutions that help organisations quickly validate and verify the identity and location of their customers.
Our market-leading technology, data and expertise help our customers improve digital access, deliver a seamless experience and establish trust so that they can transact quickly, safely and securely with their customers online.
Headquartered in the UK and with over 1,000 team members across 16 countries, we work with 20,000 customers in over 70 countries. Some of the world’s best-known businesses rely on GBG to provide digital services and keep the economy moving, from US e-commerce giants to Asia’s biggest banks and European household brands.
To find out more about how we help our customers establish trust with their customers, visit www.gbgplc.com and follow us on LinkedIn and Twitter @gbgplc.
Ashley Mann, Voxus PR for CredoLab: email@example.com
Azmeen Ansar, CredoLab: firstname.lastname@example.org