FriendlyScore, a U.K.-based FinTech solutions provider, has released an SaaS app that uses real-time social media data to help lenders create risk profiles for borrowers that lack credit.
Like many of the alternative lending companies on the market today, FriendlyScore is attempting to bridge the gap between lenders and borrowers who otherwise wouldn’t have the same access to loans. Because traditional credit scores are used to determine creditworthiness, those without long histories of credit often are rejected for capital loans.
FriendlyScore aims to offer its new approach by using social media data that’s provided by the consumers to serve as a verification system to help those borrowers gain the credibility needed to be seen as a low-risk borrower.
“Young borrowers want access to loans, and lenders want to make sure they are protected from fraud and high-risk loans. FriendlyScore fills this gap by creating a scorecard based for creditworthiness using over 800 hard data points and social textmining (NLP). An accurate credit score can now be generated simply with a Facebook profile,” FriendlyScore CEO Maciej Dolinksi said in a company news release.
According to the company, FriendlyScore has a consumer base of 6,000 and “works with lending partners by integrating an open API to pull predictive data based on repayment feedback and combines that with real-time, text-extracted social media analysis to generate a credit score.”
“We have observed some incredible capabilities of online and social data. Everything ranging from data points that reflect the quality of someone’s social and professional network, online interactions, behavioral and communication habits to verified data about basic education, employment and residential history. For example, there are strong correlations between hours of activity online and creditworthiness, as is there between level and quality of interactions with friends and creditworthiness. These data points have opened a new world of possibilities,” FriendlyScore added in the news release.
The overall goals of FriendlyScore are to help first-time borrowers gain better access to traditional financial services. Even FriendlyScore’s COO, Gideon Valkin, said he has seen firsthand how this service can benefit consumers, explaining that when he moved to London for the first time, it had taken him months to receive credit since he was new to the region.
“The world needs a way to verify creditworthy individuals without having localized credit history — particularly in countries where vast portions of the population would otherwise never have access to financial services. Modern microfinance, exemplified by the Grameen Bank of Bangladesh, has taught us that affordability and financial access are not prerequisites of creditworthiness,” Valkin said.
FriendlyScore’s most recent funding includes a $375K seed round from U.K.-based Mercia Fund Management. This followed $15,000 in prize money that the company was awarded from the Startupbootcamp accelerator program. Currently, FriendlyScore plans to focus on building partnerships with P2P lenders, crowdfunding platforms and mobile-focused banks.