GBG, an identity data intelligence specialist, announced that it has led the US$7 million Series A investment round in CredoLab, a developer of bank-grade digital risk scorecards.
Established in Singapore in 2016, CredoLab is said to have approved over US$2 billion in loans by analysing over 1 trillion data points across 21 countries.
CredoLab develops digital scorecards for any businesses that needs to make better risk decisions such as banks, lenders, e-commerce, travel, ride hailing, e-wallets, insurance and retail companies. They use an alternative data source such as privacy-consented and permissioned, smartphone and web behavioural data.
CredoLab’s artificial intelligence based algorithm crunches millions of features to find the most predictive micro-behavioural patterns, before converting them into risk scores. Matching the customer’s device patterns to these scores is said to enable any businesses to make the most granular risk assessments possible of their prospective customers, even in the absence of credit bureau scores.
CredoLab also addresses the lack of predictive data for underwriting and fraud detection purposes in emerging and developed countries alike. Supported by the increasing penetration of smartphones and the ongoing shift from physical transactions to digital ones, CredoLab provides a behavioural risk score built on data that supplements existing credit risk models to facilitate the approval of ‘thin file’ customers including millennials, small business owners, new-to-credit and new-to-bank individuals.
GBG and CredoLab entered into a commercial partnership in June this year to deploy GBG’s Instinct digital risk management and intelligence platform. With the use of GBG Instinct, banks, lenders, and mobile wallets can perform multiple data callouts including to CredoLab’s cloud service.
The partnership claims to have already seen an uplift in digital scorecard predictiveness by up to 40%, a drop in cost of risk by up to 22% and an increase in approval rates of up to 32%.
