There was a fascinating article in the FT last week concerning Intuit and others using big data to smooth bank lending to small business. The key developments were:
7 Interesting Developments
- QuickBooks (owned by Intuit) have developed a platform called Quickbooks Financing, which has facilitated 400 loans at an average value of $32,500 in the past eight months.
- The platform has signed up two of the top SMB lenders, Capital One and Wells Fargo.
- The platform asks lenders 15 questions to determine credit worthiness. Quickbooks customers can give permission to Intuit’s alogrithms to analyze the information, thus giving the banks real insight into the capacity of the lenders to service the loan.
- Intuit says it has identified 145 data points that help predict credit worthiness. This sounds so much better than the usual blunt form filling and FICO type scoring.
- UK based Sage has also announced new tools to help businesses farm data to allow cross selling to customers.
- Kabbage, an Atlanta start-up takes data from Facebook, Twitter and Yelp pages as well as transactional info from Amazon to determine credit worthiness.
- ZestFinance formed by ex-Googler Douglas Merrill claims loans made on the basis of it’s algorithms result in 40% fewer defaults compared with the usual industry scores.
- You have a great brand, QuickBooks, trying to be more valuable to its customers. By analyzing key data it’s bringing credit credibility to its customers.
- This is a reminder to all small businesses that data is everywhere. Forget the use of data for bank lending for a minute. Just imagine how you could use key data to scale your business. Don’t think in silo fashion. Don’t think of marketing Vs. finance Vs. sales. Think of your business as generating a plethora of fascinating data points that you and your team can exploit to bring clarity to building a better business.