Our segment of market is growing as credit tightens, and consumers can't get secured loans: Propel
A Canadian fintech firm is using the power of artificial intelligence to assess whether a client qualifies for a loan.
Propel Holdings uses AI to bring in less-traditional screening data – such as email address and cell phone plans – to score a client’s loan qualifications. Given the company’s clients are often already denied loans from a top bank, Propel's CEO Clive Kinross believes that AI gives a clearer picture of a client’s ability to repay the loan in cases that are deemed too risky for traditional banks.
“What our machine learning does is it takes all of these variables about a consumer and forms a more current context about them,” he told BNN Bloomberg in a television interview on Tuesday. “We are then able to apply a score to the consumer and decide whether they qualify or not.”
While Propel is a Canadian company headquartered in Toronto, most of its business is done in the U.S. and it’s just now ramping up Canadian expansion, he explained.
Kinross argued that while traditional sources of data, such as the FICO Credit Score, are effective in determining a client’s risk, there are more situational factors involved for someone with a low traditional score, such as a prior job loss that led to some missed payments.
“(They) don’t work that well for … underserved consumers and we can’t really use a traditional score for these consumers either, they don’t tell us enough information,” he said.
The AI technology also helps with processing some 40,000 applications Propel Holdings receives daily.
“We wouldn’t be able to score these consumers if we didn’t have the AI backbone to our propriety technology,” Kinross said.
Kinross said the demand for loans is growing as the big banks become more restrictive on who qualifies and those who don’t are forced to find another source.
“Our segment of the market is growing as more and more of those turn downs come to us for their loans,” he said.