Evolution Of Online-Scoring: From Loans To KYC And HR

WIRED: In a world where Bitcoin wants to make your personal identity irrelevant, disruptive data scientists InVenture want to reinvent it. People are repositories of rich information and contextual data, Shivani Siroya, CEO and founder of InVenture told the audience at WIRED Money at London’s British Museum on 8 July. And yet in most economies a single number — the credit score — remains the blunt instrument by which we evaluate who can receive loans, and who is likely to pay them back.

The result is that across the globe 2.5 billion people have no chance of receiving loans that can fund new businesses and lift entire economies out of poverty.

Speaking at the ‘People Element’ session alongside The Misfit Economy author, Alexa Clay, Siroya explained how InVenture is thinking differently. Instead of a single score, InVenture gathers an average of 10,000 data points for every user in traditionally ignored economies, to give credit, offers and other personalised services in real time.

“Just a few years ago we thought this problem couldn’t be solved,” she said. “And we thought opening up critical financial services to the base of the pyramid would be too costly and too risky.”

Prior to founding InVenture, Siroya worked in equity research, and mergers and acquisitions, at UBS and Citigroup/Healthnet, and formerly worked for the United Nations Population Fund.

Her company puts InVenture’s science into practice with its app Mkopo Rahisi, which launched in Kenya and has already loaned $1.5m (£975,000) to businesses and individuals. With this app, InVenture considers people in the context of their financial transactions, but also data like their social media accounts and web searches, to build a rich profile of their personality. From this it works out the terms of loans and delivers them instantly to mobile phones. Read the full article

FASTCOMPANY: Typical situation in the land of job hunting: You’ve managed to create a résumé that made recruiters drool. You’ve successfully run the obstacle course of video screenings and in-person interviews. Then, a recruiter tells you that the company will be doing a background check. No wild past—whew!—so you think you’re in the clear. But next you think about the thousands of dollars in student loans you have (not to mention that maxed out Nordstrom card). Uh-oh. So here’s the million-dollar question: Can HR recruiters actually see my credit score—and can they reject my application based on my financial situation?

Before you have a midday meltdown, we did some digging.

“It sounds like this is Big Brother, but yes, it is indeed true,” says Herbert Moore, co-founder and co-CEO of WiseBanyan.com. “Not only can they can see if you have had any bankruptcies in the past, but they can also see any outstanding balances on credit cards and student loans. Finally, they can see if any of these loans are past due.” And, yes, this is all legal! Read the full article

FASTCOMPANY: Lindsey Ellis had received phone calls from a debt collector when one of her acquaintances and a distant family member reported getting peculiar messages on Facebook.

“Hey Girl,” began a private message sent by Erika Edington Brinkley to Ellis’s cousin’s ex-girlfriend and her brother-in-law’s sister. Brinkley’s profile identified her as a TitleMax employee based in Alabama. “I’m looking for her veh[icle]. She’s been hiding it for some months, never paid on it.”

Ellis had taken out a loan from the title lending business TitleMax in April 2014 in order to pay $2,500 for a new transmission. TitleMax specializes in auto-title loans, whereby customers borrow cash against the value of their existing car. To people for whom traditional credit isn’t an option—borrowers with bad credit, little savings, or few family resources—these loans offer an easy alternative. But consumer advocates say that title loans, like payday loans, tend to carry a high price: astronomical interest rates, sometimes reaching into the triple digits. Read the full article