CreditVidya, a data and analytics company that facilitates profiling of customers according to the risk for various lenders, has seen a surge in adoption of its solutions post-demonetisation, Rajiv Raj, Co-founder and Director, said in a chat with BusinessLine . Apart from traditional credit risk, banks and other lenders are worried about rising fraud risk, he said.

Lenders (banks and NBFCs) tap credit bureaus regularly for information about customers and to find out whether a new customer is a safe risk. But only 22 per cent of the population is covered by credit bureaus, Rajiv said. CreditVidya’s focus is on providing a hybrid solution – that takes both traditional sources of information usually provided to bureaus such as (name, address, date of birth, PAN number, Aadhaar number, bank account details) as well as non-traditional avenues. Rajiv said these would include social, locational, transactional and behavioural attributes drawn from digital footprints left by customers. These cues are classified according to various customer categories and can help banks figure out if a new customer who doesn’t have a long credit track record is worth lending to or not.

For instance, telephone data could indicate whether you are a loner or a ‘socially connected’ person. According to data patterns that have been thrown up, the probability of default is higher if you are a loner as compared to if you were a socially connected person. While traditional sources such as bank statements provide an indication of the ability of customers to pay, non-traditional sources help provide clues to their ‘intent’ as well as stability, he said.

Rajiv said it had become imperative for banks and other lenders to use digital tools simply because of the need to scale up rapidly without increasing costs. A traditional brick and mortar model had a limitation in terms of the number of customers a branch could reach out to – usually limited to a few thousand per branch. Whereas a digital lender could reach out to lakhs of customers at a fraction of the cost it would take to run a physical operation, Rajiv said. Further, digital tools can also help banks and lenders customise offerings for their more valued customers. For instance, if you are a frequent flyer, then the bank may be able to identify this and sell you a card that provides you access to airport lounges or get you good hotel deals. Digital profiling will help banks cross-sell and up-sell more products to their clients, Rajiv said.

In an environment where speed is important, credit underwriting decisioning provided by his company will enable new lenders such as small finance banks to be up and running fast, he said. While the focus for CreditVidya is now in the lending space, Rajiv said he sees potential for use of these decision engines in various other industries including insurance, wallets and e-commerce.

CreditVidya started operations three years ago and has been ‘revenue positive’ for the past two years, Rajiv said. Operating with a team of about 53 people in Hyderabad and Mumbai, the team is set to expand and add another 15 people in the next two months, he said. The company had raised $2 million last year from Kalaari Capital to boost its tech infrastructure.

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