Cloud based credit scoring service launches in the UK
Scandinavian company Big Data Scoring has launched a cloud based service in London for consumer lenders to improve loan acceptance rates.
Big Data Scoring says it works by tapping into the broadest sources of information from across the internet, using ‘all publicly available information.’
The company said that its offering was suitable for lenders looking to lend to millennials and non-UK nationals. It said: “Credit scoring millennials and non-UK nationals has always been tricky for lenders: their lack of credit history means that lenders usually get it wrong, either offering too little or too much credit. The former means missed opportunities for institutions, while the latter can expose them to bad debt.
Big Data Scoring said this lack of knowledge was reciprocated by the consumers themselves, and in a Big Data Scoring commissioned YouGov report, 33% of people under 33 didn’t know what a credit score and almost half (47%) understood the concept of a credit score, but didn’t know their own.
Erki Kert, chief executive officer at Big Data Scoring, said: “Young people have come into adulthood with an almost immediate online presence, unlike previous generations. We have seen this can be as much, sometimes more, of a barometer of their creditworthiness as the traditional approach applied to older people. Increasingly, banks are starting to use this alternative source of information to support with their credit checking; it should eventually become an industry standard.
“Banks and lenders in the UK have a duty to lend responsibly and sensibly, yet they can’t always do this because many are still relying on outdated systems of credit scoring. In essence this is luddite banking, despite financial institutions having more data at their fingertips than ever before.
“Too much credit is a consequence of the current failings when it comes to credit scoring young people and highlights the need for action to ensure people are given what they need but also what they can afford.”