June 26, 2023

Introducing Living Identity Scores – Part 1

Introducing Living Identity Scores – Part 1

The paradigm of customer identification and credit risk assessment is undergoing a radical shift. Traditional methods, heavily reliant on credit bureau data, no longer suffice in our complex financial ecosystem. A new era is dawning, one that leverages alternative data, artificial intelligence (AI), and machine learning (ML) to enable financial institutions and fintech companies to engage with a broader, more diverse, and previously underbanked audience.


Banks, insurance companies, and fintech startups have long strived to reach underbanked populations. However, the limited data available from traditional sources has been a significant barrier. The shift towards alternative data has already shown promising results in this endeavor, especially in developed economies like the United States.


For example, ZestFinance, a fintech firm in the US, made headlines a few years ago with its innovative use of alternative data. The company used machine learning algorithms to analyze tens of thousands of data points – everything from an individual’s smartphone usage to their online shopping habits. This approach allowed ZestFinance to provide loans to underbanked populations traditionally overlooked by conventional financial institutions.


Another success story is that of Petal, a credit card company that offers access to credit to people who have historically struggled to qualify for credit cards. Petal uses machine learning algorithms to analyze an individual’s digital financial record, capturing alternative data, such as bill payments and savings, to determine creditworthiness. Their approach has successfully extended credit to the underbanked and credit-invisible populations, underscoring the power of alternative data in financial inclusion initiatives.


At 1datapipe, we understand that the relevance of these strategies extends far beyond offering a broader base of customers for financial products. It’s about providing fair and equitable access to financial services for all. We’re here to revolutionize this landscape with our Living Identity Scores and Living Identity Golden Records.


Our Living Identity Golden Records offer comprehensive global coverage, thanks to the acquisition and integration of local data sources from each country. The profiles used to generate our scores encompass over 370 attributes, providing a complete 360-degree view of the client. These attributes are continuously updated in real-time, creating a profile that represents an authentic and dynamic living identity. The data is refreshed every 7 days, meaning you get access to the most accurate and up-to-date Living Identity Profiles.


Our Living Identity Scores take this approach a step further. These innovative solutions use AI and ML to intelligently analyze a vast universe of data attributes, including alternative data outside of credit bureau data. This holistic view of a customer’s profile, which incorporates real-time updates, can significantly improve the accuracy of credit risk assessment and identity verification.


Our Living Identity Scores aren’t static; they are dynamic and continuously updated based on the most recent data, providing an accurate and current reflection of an individual’s financial health. This strategy also minimizes the risk of false negatives and false positives in identity verification and credit risk assessment, which can significantly impact a financial institution’s bottom line.


The relevance of 1datapipe’s risk-scoring solutions extends even further. We offer not just accurate scores, but also the underlying data associated with customer profiles. Access to detailed, real-time data on customer profiles can greatly enhance customer service, personalize offerings, and create a more engaging customer experience. This information can also be leveraged for cross-selling and upselling, maximizing customer lifetime value.


As we delve deeper into the world of perpetual KYC, credit risk assessment, and financial inclusion, one thing is clear: a new, data-driven approach is not just necessary; it is inevitable. At 1datapipe, we’re at the forefront of this transformation, combining AI, ML, and alternative data, to engage with underbanked populations successfully.


Over the course of the next three posts in this blog series, we will unveil the intricacies of our three distinctive risk-scoring solutions: The ID & Fraud Risk Score, the Credit & Behavior Risk Score, and the Underbanked Inclusion Score. Each of these solutions has been carefully developed to revolutionize the financial landscape and foster financial inclusion on a global scale.


At 1datapipe, we believe in using data to drive financial inclusion, offering underbanked populations the fair access to credit and banking services they deserve. Our Living Identity Scores are the key to unlocking this potential. Let’s partner together to create a more inclusive financial future. Reach out to us today to get started.