- Credit Scoring is an analytical tool, that helps lenders and financial institutions determine whether a borrower is creditworthy or not. In addition, credit scoring allows to make a decision about extending or denying the credit. Some financial organizations have their own credit scoring models, depending on their needs.
Today most of the financial services are digitized, lending and credit are not an exception. Thus, many online products make our life better, for example, online stores, banking apps, microlending online solutions.
SolbegSoft is a technological partner of one of the most popular Online Microlending Solutions in Russian Federation – GreenMoney. Our company participated in product design, development and support. Online lending system enables users to immediately get short-term loans, ensuring their personal data complete protection. SolbegSoft team is working on credit scoring process using neural networks. It helps automate the workflow for lenders and prevent the errors.
Let’s find out more about credit scoring. Here are 5 quick facts:
- Scoring is a customized traditional model, which divides all customers into 10 segments and applies several models on each customer. The higher score is related to a lower probability of default.
- Scoring is a neural network which works on raw data without preparation, and finds and highlights relevant parameters automatically.
- Neural network finds more complex patterns than the standard model.
- Scoring represents thousands of parameters for each borrower: from basic and advanced options to fraud indicators. For example: credit scoring, gender, age, cellular data, etc. Among fraud indicators are proxy servers usage, VPN usage, virtual machines usage, screen resolution mismatch with the device type, etc.
- Possibility of comparison of the client’s face biometrics with his latest photo when visiting the bank. Face recognition technology provides measurement and match of the unique characteristics for identification or authentication.
What additional information can scoring provide to lenders and financial organizations? Here are some analytics from GreenMoney scoring system:
- More than 50% of our clients on the Internet are interested in cinema and tourism.
- 74% of our customers are aged between 25 and 34 years.
- Customers who have an e-mail with a length of more than 20 characters close a loan with a delay 25% more often.
- Customers who have less than 5 contacts per month with other subscribers return a loan 40% less.
- 56% of our clients use a smartphone to get a loan (80% of them are smartphones).
As a result, credit scoring helps determine borrowing capacity in a quick manner without drawbacks with detailed information. It can be used in many financial products, not only in lending. Interested? Find out more information in our white paper.