As part of our “Five Questions on FinTech” blog series, I sat down with Arnold Pravinata, chief decision science officer at Marlette Funding, who is responsible for the company’s modeling, loss forecasting and underwriting strategies. Read on to gain his perspective on the FinTech industry, from customer service and the best thing about the industry, to the future of data and analytics.
Q1: What are the key factors affecting the FinTech industry today?
AP: The key factor for the FinTech industry is trust. It’s like going back to when people started borrowing and lending. When people didn’t have data, they just needed to build rapport and earn trust. Today, we have to build trust with three main groups:
- Consumers—we need to let consumers know we’re here to serve them and we have alternative products they can actually use.
- Regulators—we need to educate regulators about who we are, how we do business and how different we are from traditional banks.
- Investors—they supply us with the funding, so we have to show them we’re running our business in a smart way that will be successful.
Building these relationships and establishing a foundation of trust goes a long way in this industry.
Q2: How do FinTech companies better serve the customer?
AP: FinTech companies help consumers by letting them dictate how they want to be served. They put the customer first. Traditional banks usually come with the product first. They show it to customers and if they don’t take it, they shut the product down and move on with something else.
The FinTech industry was born because consumers actually need something that traditional banks cannot provide. If we can continue doing that—focusing on consumers first, figuring out what they want and how they want to be treated, and then make the products and process according to what they need—we’re going to be successful.
Q3: What’s the best thing about the FinTech industry?
AP:The best thing coming out of the FinTech industry right now is the way we differentiate from traditional banks. In my opinion, there are three differentiating factors:
- Data—FinTech companies use a lot more data than traditional banks. At Marlette, we’re continuously searching for additional data to get a better understanding of our customers without actually asking them.
- Analytics—traditional banks typically use conventional methods, which could be as simple as a decision tree. Marlette, and others in the FinTech industry, are starting to use machine learning, which allows us to extract all the hidden information that the data could provide.
- Process—as we know, traditional banks load customers with a lot of paperwork, which means it takes more time before customers actually get funds into their pockets. FinTech companies, however, can do it in a couple days.
Q4: What’s your perspective on the future of data and analytics?
AP: The future of data and analytics is really great. We’re all accustomed to traditional credit data, which basically shows how the customer behaved, and what kind of profiles and performance they had. It looks to the past. We’re striving to find data that could uncover alternative information we can’t get from typical credit data. For instance, let’s say someone has multiple loans and can’t pay one of them. Why? And which one? This data would help us figure out how to manage our business better.
We’re also in search of data that can help predict the future. For example, TransUnion provides trended data, which includes information on aggregated excess payments and total payment ratio. That historical information is very useful in actually predicting what’s likely to happen in the future.
So, the potential of data and analytics lies not only in informing about the past, but informing about the future.
Q5: Finally, like our clients, we’re always looking to improve the customer experience. So, what do you expect from a good data partner?
AP: What I’m expecting from a good partner is someone who can help us remove blind spots, or act as an advisor to us. Someone who can give advice on something we’ve been doing that could be made better, or something we haven’t been doing and need to change. I’m looking for a partner that can help us be more successful as a business. TransUnion is that partner for us.
We’d been working with TransUnion for over a year, when we actually started to launch into different channels. We looked to TransUnion to help us remove the blind spots left by the other bureaus.
Thank you to Arnold! Be sure to keep an eye out for additional FinTech interviews. Next up, I’m talking with Paul Zhang, chief technology officer and co-founder of Avant. Hear his insights on investor confidence, credit quality and the next step in data decisioning and analytics.
Click here for related blog posts for the FinTech industry.
Have questions you’d like me to ask future participants? Email FinTech@transunion.com.