Catherine Kurt’s Post

A crucial reminder for fintech lenders navigating bleeding credit portfolios! 🚀 The secret sauce is not just about the cool machine learning model with 500 variables. Understanding the nuances behind calculating default rates is key in supporting accurate business decisions. Crude default rate measures often paint an overly optimistic picture, especially problematic for fast-growing lenders. Why does this matter? 🧐 Crude measures 1. Compare "apples to oranges" 2. Neglect the time gap between credit extension and actual losses Consider this simplified example: 🔍 A fintech lender issues monthly 1-year loans, with a 3% growth rate, starting with $100k in the first month 💸 After a year, with $850k in outstanding loans, a $43k loss suggests a 5% default rate, right? Not quite. If that loss entirely comes from the first cohort, then it could actually indicate a 43% default rate, if that keeps happening for each of the 11 cohorts still outstanding. More realistically, that fintech lender’s actual default rate is very likely around 11%, since most of the losses typically come from cohorts that are 3 to 6 months old. The impact? 📊 A #startup burning capital thinking they operate at a 40% gross margin, when they are really sitting at a 10% gross margin. Without getting into any hardcore stuff on product / GTM / ops, you can see how one bad KPI throws off the entire effort, allocating resources in the wrong places, with no chance to truly scale and to deliver significant DPI. Key takeaways: 1. Utilize static pool for precise default rate evaluation 2. Beware of misleading measurements from growing balances of young cohorts, they create a false sense of performance Don’t worry, wizards do exist in this space and they are winner-take-all. 🌟 #Fintech #DefaultRates #BusinessInsights #credit #AI #ML

Adopting AI is a Win-Win for Fintechs and Customers: Thanks to Fintech.ca for highlighting the recent research study led by Ron Shevlin and Cornerstone Advisors. “Banks and credit unions must foster a culture conducive to innovation and developing sophisticated solutions to longstanding problems,” - Ron Shevlin #FintechInnovation #FinancialInclusion #SmallBusinessLending Read the article here. https://lnkd.in/gZ97D9ST

Revolutionizing business lending, Worth AI launches WorthScore, an AI-driven credit rating by Stax Payments founders @SalRehmetullah and @SuneeraMadhani, promising fast, accurate loan decisions. #FintechInnovation #WorthAI #CreditDecisioning #BusinessGrowth #bankingindustry #NFT #finance #fintech https://lnkd.in/emdCqRU3

📊 Did you know? Companies that use automated loan origination systems can reduce application time to five minutes or less, lowering abandonment rates from 60% to 25% according to Digital Banking Report! Efficient loan origination is vital for lenders, but streamlining this process can be complex. Discover how a modern Loan Origination System (LOS) can transform your lending operations and boost customer satisfaction! In our latest article, Taras Tymoshchuk, CEO of Geniusee explores: - The key features of a loan origination system - Processes involved in loan origination - Benefits and challenges of using an LOS - Future trends: AI and machine learning in LOS 🔗 Dive into the article to learn how LOS can optimize your lending process: https://bit.ly/45ZhB1G Ready to revolutionize your lending operations? Let’s explore the possibilities together! #LoanOrigination #LendingSolutions #FinTech #CustomerExperience #BusinessEfficiency #Geniusee

The Human Factor: Why Lending Will Always Need People (Even in an AI-Powered World) In our latest blog post, we explore: ✅ The importance of human insight in assessing borrowers ✅ The role of emotional intelligence in building trust ✅ How creative problem-solving sets lenders apart ✅ The future of lending with AI-powered platforms Don't miss out on this fascinating read! Click the link below to learn how AI and human expertise can seamlessly transform lending: https://lnkd.in/gX3ZpZWx #Lending #ArtificialIntelligence #HumanTouch #IndustryTransformation #Fintech #PrudentAI

Businesses want loans. FAST. Can banks keep up? Let me explain what’s happening. 👇 For many, many years, banks used to have the upper hand in the lending space. There were a few choices for a business to lend from. 🤷♀️ Those who were lending knew how much power they had, so the process could take 2 weeks to 2 months to get that loan approved. Fast forward 20 years and we have a different situation. ⏰ Now, there are plenty of choices to pick the lender that not only has the best offer but also can provide the loan in the shortest amount of time. Why does it matter? Well, for some businesses, time and specifically WAITING, can cost a fortune. It can cost a project, a client, or much more. 🙅♀️ That’s why SPEED is going to be of the essence for any analyst, not only the one working with loans but also investments, research, etc. Some institutions can asses a loan application in hours, some in days. That’s where AQ22 comes in to help assistants and credit analysts pre-process client documents so they can make the right decisions FASTER. 🏎️ We are beginning our journey with loans, but eventually, the goal is to be in every analyst's mind. Where AQ1, our first model, can work 24/7 and your financial institutions can work more effectively. All those hours... doing the exact same things, reading financial sheets, analyzing bank statements manually… it will change soon. Keep an eye on AQ22 👀 #fintech #ai #startup

🤝 Partnership announcement: Better end-to-end lending automation solutions 🤝 Credolab is thrilled to announce our partnership with HES FinTech to enhance AI-powered credit risk management and deliver smarter, more inclusive lending solutions. By integrating Credolab’s behavioural data scoring into HES FinTech’s lending automation, lenders can make more accurate, data-driven decisions. What are the benefits? ✅ Deeper Insights into Borrower Creditworthiness ✅ Access to Underbanked and Credit-Invisible Markets ✅ Enhanced Predictive Power for Scoring Models ✅ Efficient, Scalable, and Secure Lending Processes What does this mean for lenders? 💡 Access Untapped and Underbanked Market Segments 💡 Make Confident, Data-Driven Decisions 💡 Drive Financial Inclusion in Emerging Markets Together, we empower lenders to responsibly expand access to credit, optimise decision-making processes, and serve underserved communities. 👉 Click here for more information: https://lnkd.in/gjfKpEMB #Industry #Data #Insights #LendingSolutions #BehaviouralData #AI #RiskManagement #FintechPartnership #CreditScoring #FinancialInclusion #HESFinTech #credolabpartnership

💡 Excited to share an idea! Excessive loans can often lead to financial strain, especially when borrowers take on debt beyond their capacity to repay. Without a clear understanding of their income and expenses, individuals may struggle to meet monthly payments, leading to increased stress, higher interest costs, and even potential defaults. Managing loans effectively is crucial for maintaining financial stability, which is why assessing one’s repayment capacity before borrowing is essential. How about creating a platform that will help individuals assess their loan repayment capacity based on their income and expenses history. The goal is to enable people to make informed financial decisions and secure the right loan amount, ensuring financial stability. Key features will include: Automated tracking of income & expenses AI-driven risk assessment Personalized loan recommendations & EMI projections Budgeting tools for financial health management A secure, privacy-focused experience I believe this can make a real impact by helping more people navigate their financial journeys confidently. Looking forward to connecting with anyone who is passionate about financial inclusion and fintech innovation! #Fintech #FinancialInclusion #DigitalTransformation #LoanAssessment #AI #BankingSolutions #FintechInnovation #DigitalBanking #FinancialPlanning #NBFC #TechInBanking #FintechForGood #PersonalFinance

🔍 New Consumer Lending Challenges in 2024 Businesses are encountering several key challenges in consumer lending, as highlighted by industry professionals: ✅ Incorporating artificial intelligence is at the forefront of digital lenders. ✅ Unified data management. Loan origination speed is a significant challenge, with small business owners reporting delays compared to online lenders. ✅ Smoothing the loan process - integrating all parties involved for better results. ✅ Divergent Regulations in 2024 continue to pose challenges for lenders. ✅ Cost Effectiveness remains a top concern, with large financial institutions recognizing the importance of digital lending integration. Stay informed about the evolving landscape of consumer lending to navigate these challenges successfully. #ConsumerLending #AI #DigitalLending #FinanceChallenges #IndustryInsights Are you a business that is facing these all to common challenges on 2024? If the answer is yes then drop me a message and I’ll be more than happy to help. #lending #news #transformation #AI #bridging #development #unsecured #secured

#AI in Risk Assessment! “How risky is this loan?” AI models can predict the risk level of mortgage applicants with unprecedented accuracy. By analyzing credit histories, income patterns, and economic indicators, AI helps lenders make informed decisions, reducing default rates and protecting the financial health of banks. #AI #MortgageLending #RiskManagement #Banking #FinTech #DigitalTransformation #ArtificialIntelligence #SmartLending