Social data empowers millions of people around the world through their transactions with financial services providers. We wanted to bring this technology to Australia and have teamed up with LenddoEFL to do this.
We spoke with Audrey Banares Reamon, Quality and Compliance Manager, and Howard Lince III, Director of Engineering, from LenddoEFL, and asked them some of the questions you have been asking to help give you a greater insight into the power behind Social Scoring and using non-traditional data. Enjoy.
1. What does LenddoEFL do in Australia?
LenddoEFL is in the business of helping people gain access to life-changing financial services, more conveniently, affordably and quickly. Our mission to include one billion people around the world drives every aspect of our work.
In Australia, LenddoEFL has teamed up with Lodex to introduce a new way to assess individual credit risk leveraging digital and behavioural data, which empowers Lodex customers to use their data as an asset to get access to better financial services. The LenddoEFL score is a credit score that pulls from optionally shared non-traditional data. Like other credit scores, the LenddoEFL score ranges from 1 to 1,000 (the closer the score is to 1,000, the lower the credit risk). Unlike other credit scores, this score helps more consumers get access to credit, regardless of their existing credit data, by tapping into new, non-traditional data sources. Versions of this score have been used in over 20 countries, where it has been shown to be a powerful predictor of a consumer’s willingness to repay a loan.
2. Can you share with us some of the security policies taken when utilising someone's digital data to get their Social Score?
LenddoEFL uses world-class security standards in the transfer, storage and processing of information to ensure that data is kept secure.
To ensure privacy, a consumer’s identifiable information or “digital footprint” is only accessed when specific permission and explicit consent have been given by the consumer for a specific purpose with a specific financial institution.
The result is never shared with other lenders or third parties except the Financial Institution where permission has been given by the consumer, in this case Lodex.
Any personally identifiable information about an applicant will only be stored for the maximum time necessary for the provision of our result, to enable us to comply with our legal obligations under a contract or applicable laws, regulations and other accounting, contractual, fiscal and tax requirements. We may retain anonymised Information for a longer period as necessary for the purposes of our ongoing improvement of our Services and otherwise required for our legitimate business purposes.
3. What are some of the data points you include in the assessment of social scores?
We’re looking for behavioural evidence of character traits such as stability and consistency which empirically correlate with credit risk.
When the individual provides consent, the scoring algorithm considers up to 12,000 variables pulled from the individual’s digital footprint such as time to respond, number of contacts, length of threads, etc, to produce a score. The algorithm does not look for personal information - it considers metadata only.
4. What are your thoughts around Facebook's latest data breach?
We work tirelessly to uphold these tenets of choice and transparency every day. We only collect data with a customer’s explicit consent which can be revoked at any time. We will never share this data with a third party without the customer’s consent, and we will only use it as defined in our agreements with the customer.
5. How will LenddoEFL future proof its data solutions?
LenddoEFL provides credit assessment using alternative data, and the sources of this alternative data will continuously grow and evolve as we innovate on and improve our platform. Each data source we work with gives us new understanding into behavior and risk which helps us to improve in our predictive analytics. We see our ability to work with new and evolving data sources as a key advantage. This ensures that our platform is not only competitive but also not dependent on specific third party platforms.
6. What role do you see blockchain technology playing for LenddoEFL’s solutions?
Blockchain has a lot of potential. We are currently determining if/how this technology can play a role in our solution. We will share more on this note in the future :)
Thanks to the team at LenddoEFL for teaming up with us to bring Social Scoring to Australia and for creating a complimentary non-traditional way to asses someone's credit story. Want to learn more watch this video here.