Traditionally, if one wants to borrow money from banks, he/she needs to provide documents such as financial statement, credit information, etc., resulting in new graduate who just start working or people without credit record often being rejected by banks. However, AI technology is revolutionizing the traditional loan application process. The AlphaKYC platform developed by AlphaLoan, a startup in the Startup Terrace Linkou, uses AI and big data to analyze personal credit rating and loan repayment ability, solving the problem for young people in applying loans.
In the era of pure online banking, the consumer financial market has completely altered, making banks to realize that traditional loan application process can no longer fulfill the demand of the millennial generation. A good example is that in the future, one can apply loan from a bank through a set of personal phone number. On the other hand, financial institutions have a new approach when assessing customer risks. In the past, if a bank wants to know who is the customer (KYC), it needs to put in significant amount of manpower. However, with the help of AI, banks can now find the information of customers through payment records, social media DNA, digital footprints, and open data.
Use AI and Data Computation Technologies to Create the AlphaKYC Platform
The AlphaKYC platform combines AI and data computation technologies to create a credit evaluation service. Computation of the data from judicial records, MY Data of the government, and social media DNA is conducted to analyze customer behavior and consumption information, managing the risks of customers. From the footprints of social media alone, 62 social media DNA values and financial stress indicators can be analyzed and produced. Jian-Hong Lin also emphasized that the technology can instantly know the various aspects of customers to accurately understand their behaviors and habits.
In terms of the process, users only need to select “search user data” on the AlphaKYC platform, activate the AI crawler, and start the analysis program. That is, through a single interface, the integrated data search and analysis function can be carried out at once, helping users to create a set of credit rating system for banking institutions, car rentals and other FinTech operators. Liang-Quan Huang said that the data analysis technology of AlphaLoan can help banking institutions find more young people who have adequate credit, allowing them to quickly and fairly receive financial services.
Despite the above-mentioned advantages, the market also has concerns on issues such as information security and the trust of users on the platform. Whether or not consumer information can be protected is also an important issue. Jian-Hong Lin said that the AlphaKYC platform offers serves to companies that require credit information, such as banks, and car loans/leasing companies. Data and personal information security control is still the key of this service. Therefore, we will also conduct KYC for our business partners. Once they meet the standards, besides business contracts, data transmission encryption and equipment address control are also the essential requirements.
From Consumer-Oriented to Bank-Oriented, the AlphaLoan is Further Upgraded
The first-generation product of AlphaLoan is the "Real Loan Comparison Website" based on the loan approval prediction model. It can provide predictions of loan approval from all banks based on to the needs of users, including interest rates, loan amount and loan approval rates, allowing users to compare the information at once. This eliminates the trouble for users to ask several banks and avoids the credit deduction caused by repeated checking of credit information in a short period of time. Since its launch in 2016, there have been more than 200,000 users, and the amount of loans approved has exceeded NT$ 10 billion.
The success of the "Real Loan Comparison Website" has allowed the co-founders Jian-Hong Lin and Liang-Quan Huang to see the need of personal big data credit evaluation. In addition to the risk control system that was extended from core technology, they continued to develop big data collection and crawling/ETL/analysis modeling technology. However, the start of the development was not easy. The technology took three years to develop. We thought it would make a big hit as soon as it was launched, but the market did not buy it. Although many banks hoped to incorporate these data or analysis technologies, the cost consideration from the internal managements calmed the urgency of banks in adopting new technologies. This challenge has made the AlphaLoan team to reconsider its strategies. In order to make the technology more popular, it is necessary to lower the entry barrier for users.
Team with Data Science Background Solves Market Problems
Due to the high entry barrier, the new data risk control approach was challenged by the market. At that time, many banks asked the AlphaLoan team to build their own KYC system using their own technologies. However, Jian-Hong Lin believed that if the subscription-based system cannot be promoted, it will be difficult to realize inclusive finance. Due to the COVID-19 epidemic this year, Jian-Hong Lin and Liang-Quan Huang once again saw the opportunity to launch the AlphaKYC platform. The single-interface based platform uses automated crawling and analysis, saving a lot of manpower and time for carrying out repetitive work. As soon as the beta version of the platform was launched, it signed collaborative contracts with two FinTech institutions. In compliance with international information security standards, AlphaLoan has gradually introduced information security and personal information certifications such as ISO-27001 and ISO-27701 to expand the scope of information security and earn market recognition.
The AlphaLoan team currently has 17 employees, and more than half of the team members are data scientists, AI developers, and application engineers. Although the team does not have any banking background, it is able to develop an innovative AlphaKYC platform for the financial industry, revolutionizing the market. Jian-Hong Lin said that the goal of the team is to use data technology and AI to promote inclusive finance, allowing more people who are unable to provide stable income records and who have no credit history, such as Internet influencers, SOHOs, Internet entrepreneurs, etc., to be able to apply for credit cards or loans.
With the rise of pure online banking and financial technology, the future financial market will be dominated mostly by digital natives. The Beta version of the AlphaKYC platform was launched in July, and the analysis technology is being continuously optimized. In the future, the multi-language based platform will be developed for overseas market. Last year, the AlphaLoan team stationed in the Startup Terrace Linkou and received subsidy from the AWS (Amazon Web Services) Cloud Center. The international resources of the Startup Terrace Linkou help the team to reach the world and create the largest KYC platform in Asia.
Written/Photographed by: Startup Terrace Editorial team