PRESS RELEASE from MONI
August 6, 2019
(Please note that this is a machine translation)
MONI , the innovative digital financial services company that operates in Argentina and Mexico, presented the latest update of its innovative system of credit scoring based on machine learning and big data, with which it provides credits for 100 x 100 online consumption through a app that realizes the granting of immediate form and the accreditation of the funds in account in the act.
Unlike the traditional scoring provided by credit bureaus, MONI uses an innovative tool based on machine learning algorithms, which using big data analytics, allow you to more accurately predict the risk profile of each applicant.
In the case of people who, although they have a bank account, the vast majority do not use basic financial services, so they do not have a credit history at the Central Bank, the MONI granting system performs scoring using a series of almost 200 alternative factors to analyze and predict in real time the risk profile of each loan application. The brand and model of the cell phone, the size and resolution of the screen, the access time to the platform, the type of account and bank, the IP from which it is connected, the geolocation, the mode of written expression, the format of Name and domain of the email, among others, are the most relevant factors that MONI uses to establish 10 segments that range from a probability of default of 2.5% to 20% that automatically and immediately determine the maximum amount and term that It is granted to each client.
“The financial inclusion that fintech is generating around the world is only possible from a break in the status quo of scoring systems, since these systems are based on grant criteria that leave out a large majority of the population, especially at the base of the pyramid, where there is a large market with unsatisfied demand in relation to basic financial services such as credit cards, consumer loans and digital payments, ”said Juan Pablo Bruzzo, CEO of MONI, and added:“ These people, who are generally good payers, cannot be subject to credit in the traditional banking system because they do not have a credit history, which creates a vicious circle that until the arrival of the fintech seemed impossible to cut ”.
So it is that when crossing the profile of the base of more than 900,000 loans granted by MONI so far, it appears that 70% is below the 300 rating points according to the scoring systems of the credit bureau used by the banks, when the market average for a bank to consider a person as a subject of credit is around 500 or 600 rating points.
In the same vein, a simple exercise of crossing public data on population, socio-economic level (NSE) and information from the Central Bank results in a crude postal of the minority segment on which the banks concentrate their loans and the urgent need to include financially to the vast majority of the Argentine population. While banks lend to 84% of the ABC1 segment, 70% of C2 and 51% of C3, loans in segment D1, where almost 80% of the Argentine population is concentrated, barely reach 19%.
“So vast is the population segment that even having an account in a bank does not access the most basic financial services, which turns out to be one of the main reasons why Argentina has so low credit market development. According to the latest data from the World Bank, the share of loans to the private sector in the European Union reaches 94.6% of GDP, in Latin America and the Caribbean to 44.9%, while in Argentina it represented only 14, 3% of the national GDP, ”said Juan Pablo Bruzzo.
The default models developed in Python and Jupyter by the MONI data science team are based on specific machine learning libraries such as TensorFlow and LightGBM, which are open source algorithms developed by Google and Microsoft. The solution processes in the AWS cloud and uses Tableau for data visualization and monitoring of results in real time.
These models feed back and improve their performance and effectiveness constantly, “learning” based on the data of the payment behavior of the clients on which the scoring was performed at the time of the loan. Nearly 180,000,000 data generated by more than 900,000 loans granted by MONI are the company’s main asset and the key input for its scoring model to achieve a high degree of accuracy to predict the risk profile of each operation.
Also, for the purpose of comparatively evaluating the performance of its innovative scoring system, MONI compares the top 10% of customers identified with its model, with the top 10% of the traditional credit bureaus scoring. The result shows that only in the first step the model developed by MONI detects new customers with 60% less delinquency compared to the market standard, a value that rises to 80% in the case of recurring customers.
From this innovative scoring tool that uses machine learning and big data, and with just a few quick and easy steps that are made 100 × 100 online on the MONI website or app, customers can access any of the options of loans for immediate granting and instant account accreditation, thus expanding the options for access and use of digital financial products to a large number of people in the under-banked segments.
MONI is an innovative company that provides digital financial services in Argentina and Mexico. With a business focus focused on the democratization of access to financing and financial services to individuals under-banked or neglected by the traditional banking industry, its greatest added value has to do with allowing the common citizen to use technology to solve their financial needs everyday.
Founded by entrepreneurs Alejandro Estrada and Juan Pablo Bruzzo, MONI has consolidated its innovation profile that has earned it a leading position in the regional fintech ecosystem. The company currently has shareholders and institutional investors of global relevance, including the International Finance Corporation (IFC), the World Bank Group institution, the IDB Invest, the private sector institution of the Inter-American Bank Group de Desarrollo (IDB), Nxtp.Labs, the entrepreneurial capital fund, together with Alec Oxenford, Fabrice Grinda and other pioneer entrepreneurs in the entrepreneurial ecosystem.
More info: moni.com.ar
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