Michele Tucci, the Chief Strategy Officer and Managing Director for Americas at Credolab, a groundbreaking fintech company revolutionizing credit risk assessment.

In this episode, Michele shares his incredible journey in the industry and how Credolab utilizes smartphone metadata analysis to provide financial inclusion.

Discover the three game-changing insights they discuss:

1️⃣ Unveiling the Secret: How Smartphone Metadata Analysis is Transforming Credit Risk Assessment

2️⃣ The Shocking Truth: Traditional Credit Assessment Methods are Obsolete

3️⃣ The Future is Here: Harnessing the Power of Machine Learning Algorithms for Accurate Creditworthiness Evaluation

Tune in to this episode to gain exclusive access to Michele's expertise and learn how Credolab is reshaping the financial landscape with data privacy and security at the forefront.

Also, watch the entire episode on youtube.

Links:

Credolab

Website: https://www.credolab.com/

Linkedin: https://www.linkedin.com/company/credolab/

X (Twitter): https://twitter.com/CredoLab

Facebook: https://www.facebook.com/credolab/

Fintech Confidential

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Time Stamps:

[00:10:14] Why Listening to Clients is Crucial for Product Development

Find out why listening to clients and their feedback is essential in shaping the development of a product.

[00:06:13] The Fintech Industry: What's Changing?

Discover how the fintech industry is evolving differently in developed countries and emerging markets, and what it means for you.

[00:13:26] Smartphone Metadata Analysis: A Game-Changer for Credit Risk Assessment

Learn how Credo Labs is revolutionizing credit risk assessment by using smartphone metadata analysis.

[00:14:55] Financial Inclusion: Solving the Problem of the Unbanked

Explore the potential of using smartphone data for credit risk assessment and how it can help address financial exclusion.

[00:16:39] Breaking the Mold: Changing Credit Assessment in Financial Institutions

Find out how Credo Labs is disrupting traditional underwriting processes and providing access to credit for individuals and small businesses.

[00:19:43] Machine Learning and Standardized Data Sets: The Future of Credit Assessment

Discover how Credo Labs utilizes machine learning algorithms and standardized data sets to predict creditworthiness using smartphone metadata.

[00:29:16] Unveiling Fraud Detection and Data Manipulation with Smartphone Metadata

Uncover the secrets of using smartphone metadata analysis to detect fraud and manipulate data.

[00:35:13] Credit Invisibles: How Credo Labs is Making a Difference

Learn how Credo Labs' innovative solution addresses the issue of credit invisibles and promotes financial inclusion.

[00:40:53] Privacy and Security: Protecting Your Financial Data

Understand how Credo Labs ensures the privacy and security of your sensitive financial data.

[00:44:15] Affordability Checks and the Role of Salary in Credit Risk Assessment

Discover why affordability checks and considering salary are crucial factors in assessing credit risk.

[00:45:52] Analyzing Calendar Events and Contacts: The Key to Understanding Behavior for Credit Risk Assessment

Find out how analyzing calendar events and contacts can provide valuable insights for credit risk assessment.

[00:48:22] The Power of Interconnectivity: Analyzing Phone Behaviors for Credit Risk Assessment

Explore how the interconnectivity between different devices can help analyze individual phone behaviors for credit risk assessment.

This is a Production of Diamond D3, Media

ABOUT:

Michele Tucci: Michele Tucci is the Managing Director of Credolab business in North and Latin America and also Credolab's Chief Strategy Officer. Prior to joining Credolab in 2018 as Chief Product and Marketing Officer, Michele worked on international consulting assignments, product management, and business development roles with the likes of Capital One, MasterCard, Intesa Sanpaolo Bank, and Telecom Italia Mobile. He has conducted business in 47 countries and has in-depth knowledge derived from nearly 22 years in cards, payments, wallets, consumer lending, FinTech, and digital products.

Credolab: Credolab is revolutionizing the financial industry by providing digital scorecards based on smartphone metadata analysis for banks, neobanks, EWA apps, crypto lenders, and any industry dealing with risk, fraud, and marketing. Their core technology is built on proprietary Machine-Learning algorithms and allows an analysis of over 10 million behavioral features to make a predictive credit risk score, marketing predictions, or fraud detection without processing any personal data. For now, the Credolab SDK leverages experience of 200M+ digital footprints and 30M+ people scored to date for 200 corporate clients, including well-known fintech companies and unicorns in over 30 countries.

Tedd Huff: Tedd Huff is the Co-Founder of Voalyre, and the President & Founder of Diamond D3, a professional services consulting firm focused on global payments and marketing. He is also a video podcast host and producer of Fintech Confidential.

Over the past 24 years, he has contributed to FinTech startups as an Advisory Board Member, Co-Founder, and Chief Experience Officer, providing strategic and tactical direction for Global Payments OpenEdge, Heartland Payments, Nuvei, and TSYS, among others, focusing on growth while delivering innovation, process improvements, and user experience-driven value to simplify the complexity of payments.

Diamond D3, Media: A media creation, management, and production company delivering engaging content globally

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Don't listen to VCs.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

VCs are helpful of course.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we all need capital to grow, capital to bring an idea from being just

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

an idea into an actual product.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

However,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the objectives of VCs are not necessarily, or not always aligned with the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

objectives of you as an entrepreneur.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Focus on profitability

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

rather than growth at any cost.

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Welcome to FinTech Confidential, bringing you the people, tech and companies

that change how you pay and get paid.

Tedd Huff - Fintech Confidential, Host:

Michele, welcome to the show.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Thank you Tedd Good to be here.

So folks, today we're diving into the world

of Digital scorecards with Michele Tucci, the Chief Strategy Officer in Managing

Director for America's for Credolabs.

Credolab is a revolutionary smartphone metadata analysis tool, and Michele has

been shaking up FinTech from Capital One all the way over to CredoLab

with a career spanning over 47 countries and turning smartphones

into crystal balls for credit risk.

He's here to tell us how Credolab is making the world

of credit a whole lot smarter.

Now, before we dive in, Michele, I need to understand like how did

you fall into FinTech and what has kept the spark alive for you?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Yeah.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Thank you Tedd.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, FinTech, I think I've been into FinTech before it was even sexy,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

before it was even called FinTech.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

No, banks at the end of the day are, uh, technology companies

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

and with a banking license.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I used to work for a bank in Italy, but actually before

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that Capital One in Italy, when.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Continental Europe, and I'm originally Italian, continental Europe, from

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a capital one point of view was considered as an emerging market.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Imagine that back in, in 2000.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Now, emerging markets are different.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You know, emerging markets are Southeast Asia, Latin America,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Africa, at that point, Italy, ,Spain, France were considered from

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a US point of view, like emerging.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that's where I started,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

applying what I knew about consumer behaviors, about preferences

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

for credit versus debit,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

to consumer finance products and, uh, credit cards specifically.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that, I went to get my mba.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I got, uh, into MasterCard and that's where the world

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

as I knew changed completely.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

That's where tech really came, uh, became a, a massive part of my job.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, uh, Combining tech with, uh, uh, analyzing preferences, analyzing

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

behaviors, analyzing why people spend the way they do, uh, the, the transactional

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

patterns and, uh, why the debit cards are preferred to credit cards in in a country.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Those reasons are different from, uh, another country.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

um, and that's where, uh, I moved from MasterCard to a mobile

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

payments, uh, company, uh, P.O.S.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Terminals in Asia, where not very famous.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

former square was just starting in the us That

Tedd Huff - Fintech Confidential, Host:

Mm-hmm.

Tedd Huff - Fintech Confidential, Host:

that

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

was 2009 and we were already pushing

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

for, uh, mobile payment terminals in,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Southeast Asia for instance, or, uh, even Australia, New Zealand.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, uh, from that I went onto a private equity fund.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Which invested 2 billion FinTech assets.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I was working on finding technologies that would enable these FinTech

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

assets, mostly lenders, digital lenders, to approve more customers,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

to be smarter in the way they were either servicing these customers or,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

um, approving them in the first place.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, um, and then I found,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Credolab I joined them and, uh, has been five years in the making,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

uh, still having a lot of fun.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Still a lot to do and, uh, still think FinTech is the place to be.

Tedd Huff - Fintech Confidential, Host:

Michele, you've, you've conducted

Tedd Huff - Fintech Confidential, Host:

business in over 47 countries.

Tedd Huff - Fintech Confidential, Host:

you've just mentioned a few of the areas, cards, payments,

Tedd Huff - Fintech Confidential, Host:

wallets, lending, investing, other digital products in FinTech.

Tedd Huff - Fintech Confidential, Host:

How has this diverse experience shaped your perspective on how

Tedd Huff - Fintech Confidential, Host:

the FinTech industry is evolving?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The FinTech industry is evolving

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

in different directions.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I would say that execution and innovate product innovation can play equally good

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

roles the US or developed countries.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You tend to focus on product innovation, in emerging markets

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you focus more on execution.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Now, there are plenty of.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Copycats,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

That were successful in the US and then were replicated elsewhere, team.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I see also this trend changing Asia leading the way in

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

terms of mobile payments.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, think about QR codes in China,

Tedd Huff - Fintech Confidential, Host:

Mm-hmm.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

in, uh, Southeast Asia.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They became a lot more successful, uh, and a lot faster than NFC payments ever did,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

uh, in, in, uh, Europe, uh, uk, in the us.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So there is a difference where the tech companies are pushing

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

for the latest technology.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

N F C contact list.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And on the flip side, you see Chinese,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

tech companies focusing on what people have today.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They have a camera merchants, they don't need to have the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

fanciest, latest post terminal.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They can just print a Q code.

Tedd Huff - Fintech Confidential, Host:

Mm-hmm.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

print QR codes, you scan QR codes, and

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

right there you have mobile payments.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the next logical evolution for them was QR codes interoperability and the ability

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

to use the same wallet in China elsewhere.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Now we are, from that point of view, the US or NFC technology allowed for a

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

smoother transition because the technology was already the same everywhere,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

but they required also investment in, uh, point of sale terminals.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The FinTech is evolving and um, I think as long as we have the customer at the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

end, at the center of what we do, then we are all going to into the same point.

Tedd Huff - Fintech Confidential, Host:

If you were to describe your

Tedd Huff - Fintech Confidential, Host:

journey so far in FinTech

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Yeah,

Tedd Huff - Fintech Confidential, Host:

using a movie title, what would it be?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

well top of mind comes top

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

gun maverick, but my friends will laugh at me and my ego.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Because, uh, nobody believed in him.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I also come from a small village uh, in, uh, Southern Italy.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I made a career out of something that even my father today gave up understanding

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

and, uh, he gave up understanding what I do already 15 years ago, maybe se 16, he.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And he told me,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I don't know what you do, I see you happy and that's good enough for me.

Tedd Huff - Fintech Confidential, Host:

Hmm.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And he's 88 today.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, go explain how we turn, for instance, smartphone data into

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a, uh, credit risk assessment.

Tedd Huff - Fintech Confidential, Host:

Yeah.

Tedd Huff - Fintech Confidential, Host:

Oh, that gives me chills just thinking about that because I, I had a similar

Tedd Huff - Fintech Confidential, Host:

conversation with, with my grandfather before he passed, and, and that was,

Tedd Huff - Fintech Confidential, Host:

that was something that was really, that, I mean, that, that holds me true.

Tedd Huff - Fintech Confidential, Host:

And my, my dad still doesn't understand it either.

Tedd Huff - Fintech Confidential, Host:

Just like yours.

Tedd Huff - Fintech Confidential, Host:

And he's just, he's just happy that I'm, I'm having fun with it as well.

Tedd Huff - Fintech Confidential, Host:

Michele, with over two decades of experience in FinTech, what

Tedd Huff - Fintech Confidential, Host:

is the most important thing that you have learned so far?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Am I that old?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Two decades.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The, the way you put it now, it makes me feel already, uh, Okay.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I didn't realize I have two decades of experience.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Yes, you're right.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The most important thing I think I learned is to listen to your clients, um,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

whether they are consumers or clients.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They drive product development.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They drive their feedback, your your feed, their feedback drives the way

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the product eventually will be shaped.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

When we launched mobile payments in the past, in one of the companies I

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

worked for, we made one crucial mistake.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We thought that by skipping one logical step in the,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

features that the pro that the market expected the product to have,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

would've been a differentiating point.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And in fact, decision led to the company being sold for one euro to, to a

Tedd Huff - Fintech Confidential, Host:

wow.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So if we listened to the market than

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

idea of what the market wanted, I think we could still be alive as a company.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And this holds true also for,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Consumer feedback.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

No, you may have, um, an M v mvp, a minimum viable product that works

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

and you have some initial traction, but, uh, you probably need to

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

invest more to find market fit And market fit without product fit,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

doesn't allow you to scale and vice versa.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So this is something that I learned later on by talking to VCs, to raise funds.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They have product fit late and also market fit.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And initially I thought this was, uh, kind of a checklist for VCs,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

useless as an entrepreneur, we, we are building companies.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We are bringing, products to market, and we want these products to be

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

bought by, by c clients and VCs are not charity organizations.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They will invest if they see uh, but, uh, growth to, for the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

sake of growth is not healthy.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Fit, market fit, they all together, but prefer it to be in a coherent path

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

towards sustainability, uh, sustainable growth rather than double digit growth.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They will only please investors and, uh, and nobody else.

Tedd Huff - Fintech Confidential, Host:

with you talking about product market fit.

Tedd Huff - Fintech Confidential, Host:

Credolab is revolutionizing FinTech

Tedd Huff - Fintech Confidential, Host:

With it's digital scorecards, and this is all based on smartphone metadata analysis.

Tedd Huff - Fintech Confidential, Host:

Could you share just a little bit more about the vision and mission of

Tedd Huff - Fintech Confidential, Host:

Credolab before we dive in too deep?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Sure.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The vision of Credolab is to enable more people to have access to

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

financial services at fair terms.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And the problem that we are solving is lack of data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

way we know access to credit in, uh, developed countries is

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

different from the way people access credit in emerging markets.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, in, uh, the, in the us having a credit score is, Almost a

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

requirement, even on dating apps.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I found women asking if you have credit score below seven 50, swipe left.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So from a US point of view, that became,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

even to, to an extreme that I don't necessarily agree with.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

But if I don't have a credit score and I'm new to the us so I didn't have a credit

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

score at that point, then what do I do?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I cannot even date.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we found is that smartphone data be rich depicting an image of a

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

user, any user, and calculating their probability to default a payment.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we found smartphone metadata as a way to compensate for

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the lack of traditional data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

To assess customers.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the problem is that if you don't have credit history, if you don't

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

have, uh, credit bureau scores, then traditional banks, they rely on,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

uh, obsolete underwriting models.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Their best way to proceed is to just reject your application.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that's not fair.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And that leaves millions, literally millions of people behind excluded.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we know that,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

from the World Bank, the um, number of unbanked people globally went

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

down from 1.7 billion to 1.1.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, and that's good news, but

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

there is still 1.1 billion people outside of the mainstream

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

financial services ecosystem.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

How do we bridge that gap?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Guess what These people most likely have a smartphone, these people by simply using

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the smartphone for their day-to-day lives.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

WhatsApping, somebody even sending a an s m s actually generates a footprint can

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

be mined in all the privacy compliance

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

without compromising data protection.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

But all this data can be mined a, what I believe to be a noble, uh, noble

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

case, which is financial inclusion.

Tedd Huff - Fintech Confidential, Host:

So I was doing a little bit of

Tedd Huff - Fintech Confidential, Host:

research and looking through the social medias and all this fun stuff

Tedd Huff - Fintech Confidential, Host:

and there was something on your Twitter page that I would

Tedd Huff - Fintech Confidential, Host:

really love to understand.

Tedd Huff - Fintech Confidential, Host:

that you aim to change the way the world looks at credit.

Tedd Huff - Fintech Confidential, Host:

How is Credolab doing that?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

are trying to change the way.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Financial institutions look at people, look at applications of, a credit card,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a personal loan, a buy now pay later, an auto loan, uh, two-wheeler loan, anything.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

banks have an institutionals role to, to push the economy of

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the country they serve forward.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

credit has a

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

vital role for small businesses to grow, for people to realize their dreams.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

But if these people, very people and very,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

business owners don't have access to credit, then whatever great ideas

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

they have cannot be implemented.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Even working capital for a small business owner is crucial

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

for him to grow her to grow.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The way Credolab works allows banks to change the way they

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

look at customers complimenting their traditional underwriting

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

processes something that is modern,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

something that is based on today's data, something that is based on

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

data that each individual user generates today in real time.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

fresh data is, it doesn't get any better than that

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

when you think about assessing loan application, you want to have the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

freshest data, most, uh, relevant data for that particular individual.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

and even credit Bureau scores, however important they are, they may not always

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

be updated they may not always be correct.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Even

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

In fact, in the US for instance, there is a federal law called the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Fair Credit Reporting Act, which allows individuals to request for

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a change in information in their credit report that is being wrongly

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

reported and may have led to a rejection, in Credolabs case.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You cannot change the way you,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

acted on your smartphone.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You cannot change or amend how many apps you downloaded, your

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

app installation patterns.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You cannot change

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

how many selfies you took.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Which could be correlated with a lower propensity to repay a loan,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

for instance.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the ability us to match

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

to your behaviors on the smartphone really correlates statistically with

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a propensity to repay a loan or not.

Tedd Huff - Fintech Confidential, Host:

So I'm assuming with all of this

Tedd Huff - Fintech Confidential, Host:

data that you're collecting,

Tedd Huff - Fintech Confidential, Host:

you guys are are pulling it together, working through it, using

Tedd Huff - Fintech Confidential, Host:

AI and machine learning and AI and machine learning is still sort of

Tedd Huff - Fintech Confidential, Host:

a black box for a lot of people.

Tedd Huff - Fintech Confidential, Host:

How is Credolab working to change that particular perception

Tedd Huff - Fintech Confidential, Host:

of it being a black box

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, first of all, we don't use ai.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we use machine learning of the vast amount of data that

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we process, we don't use ai.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And the reason is that AI generates black boxes and we uh, find helpful

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

in, uh, selling black boxes.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So the, um, and also there is a principle that always applies to any big data,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

solution.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Garbage in, garbage out.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

If you have, wrong data or unstructured data or uncleaned data in the modeling

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

pipeline, then you'll have a, an outcome that will not be useful.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So when we started working, and this was back in 2016.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We started analyzing device, uh, fingerprints and uh,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

on Android and iOS both.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we realized that this is the same kind of data everywhere.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we standardized to access the raw data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

also created a way to generate a data set without compromising the user's identity.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So our data sets are always anonymized, but also standardized globally.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So if you are a multi refinance, uh, multinational company that has

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

operations in multiple countries,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you can rely on a dataset that is always the same which adds a lot of

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

benefits from a data point of view.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So back to the AI ml kind of, uh, kind of question deem, you analyze on average,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

70,000 data points, Per client, you need to have algorithms that are

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

able to eliminate the noise from the big data and to focus on those

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

data points that are predictive,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that have local relation with each other.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Because you want to increase the predictive power of, of the end outcome.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

what we also did in terms of explaining score, explaining the output to our

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

clients to use net logistic regression as the very last step of our calculations.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And the reason is that, well, first of all, it works.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You don't need any fancy AI generate a predictive score.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And second banks are used to,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Work with net logistic regression so they understand it.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So from a statistical point of view, we can easily explain having too many

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

selfies bad for your, uh, credit score.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Alternative credit score.

Tedd Huff - Fintech Confidential, Host:

You mentioned you, you guys aren't doing

Tedd Huff - Fintech Confidential, Host:

anything with ai, but your proprietary technology is based on machine learning

Tedd Huff - Fintech Confidential, Host:

algorithms and doing the research.

Tedd Huff - Fintech Confidential, Host:

It looks like it could do over 10 million different behavioral features.

Tedd Huff - Fintech Confidential, Host:

what are the key problems in FinTech that this specific

Tedd Huff - Fintech Confidential, Host:

technology is designed to solve?

Tedd Huff - Fintech Confidential, Host:

how does it solve this data?

Tedd Huff - Fintech Confidential, Host:

When you have a disparity between a low end Android handset all

Tedd Huff - Fintech Confidential, Host:

the way up to the super high-end

Tedd Huff - Fintech Confidential, Host:

iPhone 14 Pro Max device, you've got that big disparity.

Tedd Huff - Fintech Confidential, Host:

How are you helping solve that technology gap?

Tedd Huff - Fintech Confidential, Host:

With this solution,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we solved a problem by letting

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the algorithms identify the data points that are predictive.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So there is no, uh, human bias, uh, brought into the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

models and, fun fact perhaps,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

iPhone users tend to be less risky than Samsung users.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

In our experience, and users tend to be less risky than Huawei users.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So by looking

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

at the device brand itself, you could already get a sense how risky an applicant

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

may be, but that alone may not be enough to reject or approve a customer.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Myself, for instance, I'm a Samsung advocate, I'll never buy iPhones, and

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

does it make me less good of a repayer because my preference is for an Android

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

operating system versus an iOS one Other elements are driven simply by statistics,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

simply by value a raw data point.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, uh, you, you mentioned that we have 10 million behavioral

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

features, which we do with part of credolab's, intellectual property.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we have engineered so many features because we don't want

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

to leave any, any stone unturned.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So imagine you are Nigeria in the US or uh, in Japan.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Your behavior as an applicant are, uh, completely different.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And so when we, however, you are using an Android device,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you are using an iOS device.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

How do we make sense of these behavioral nuances, uh, to allow

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you to be scored in a fair way?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

That's why we go so wide, 10 million behavioral features and then we narrow

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

down through quite greedy algorithms and quite fast about 5,000 features.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we go super wide until we go super narrow to identify the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

micro behavioral patterns that are predictive for you, right?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You as an individual.

Tedd Huff - Fintech Confidential, Host:

That is very interesting.

Tedd Huff - Fintech Confidential, Host:

I'm sitting here thinking and going through it.

Tedd Huff - Fintech Confidential, Host:

, just looking at all these different data points.

Tedd Huff - Fintech Confidential, Host:

You mentioned selfies, you've mentioned number of applications.

Tedd Huff - Fintech Confidential, Host:

There's so much data in there, and I'm starting to wonder okay, so what

Tedd Huff - Fintech Confidential, Host:

behaviors do I have that, that show it?

Tedd Huff - Fintech Confidential, Host:

Uh, and, and, and the other piece that starts to come into mind is the problem

Tedd Huff - Fintech Confidential, Host:

that, that I'm seeing Credolab solving

Tedd Huff - Fintech Confidential, Host:

is the non-traditional lenders.

Tedd Huff - Fintech Confidential, Host:

That are going after the, the underbanked or unbanked folks.

Tedd Huff - Fintech Confidential, Host:

how are they going to implement or bring Credolab into either their

Tedd Huff - Fintech Confidential, Host:

mobile application, their website?

Tedd Huff - Fintech Confidential, Host:

Like how is that actually done

Tedd Huff - Fintech Confidential, Host:

for our, our good FinTech founders out there

Tedd Huff - Fintech Confidential, Host:

that are watching and listening,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Yeah, it's done by integrating a

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

small library of code into their mobile app, into their website,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

or both if they are, using both.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And it's a proprietary, SDK software development kit, uh,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

quite light, unintrusive that can be deployed in, uh, as little as

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

two days after the prioritization.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

It prioritization is done, uh, which usually

Tedd Huff - Fintech Confidential, Host:

always prioritization.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

right, and it usually takes a lot longer

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

than the actual coding, we opted for an SDK integration because it allows us

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

to create a closed loop between us, the user and the financial institution so

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that it also allows us to protect data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We only use data that we access and process through our proprietary SDKs,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we access data of that customer only.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Within the context of that customer applying a personal loan with

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that that is client of Credolab.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we don't buy data from any third party.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We don't need to.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We don't even need to know the identity of the user.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We don't know if Tedd or Michele is applying for a loan.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We just know that one device is coming through the door and we generate a

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

score for that particular device.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

This protects the user's data, insulates the financial institution from

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

reputational risks case of data breach and keeps Cradle Labs safe because we

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

don't process personal data at all.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Although on the surface it looks like we access a lot of data,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

actually, we use this data only for one purpose, which is allowing

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

people to be scored at fair terms.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And we don't sell data to any third party.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we use the same data to, uh, detect fraud.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And whenever a financial institution goes into the bottom of the pyramid,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the unbanked customers or, um, the so-called theme files, that's

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

where have less data available.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, uh, that's where also, uh, fraud is more, uh, prevailing.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, first party fraud, for instance, a big pain point for any digital lender.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So how do you know if the customer is manipulating data?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

That's a simple thing to do if you have Credolab's, uh, technology embedded.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

No, we look at the way you type, how familiar you are with the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

data you're typing without even knowing what are you typing.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that's the beauty of the technology as well.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we look at, uh, how long it takes for you to type Tedd versus, how, how many

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

times you've changed the income value.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So that form of data manipulation can be easily detected.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

but also imagine the way you are using the mouse or the finger on the screen.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

human behavior is such that you kind of move not irrationally, but, uh,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you don't follow straight lines.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

But if you are a bot, you go the way down, you go the way left, right, diagonally.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

when you play, the session of an interaction, uh, and comparing

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the human interaction with a body interaction, then it's obvious

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that, uh, uh, the two are different.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we can detect the bots in this way as well.

Tedd Huff - Fintech Confidential, Host:

Oh, wow.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

and this is all without friction

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

added to the end user experience.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So what we don't wanna do is to ask end users to do something else.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And if you are a good customer, if you are a genuine you shouldn't be worried

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

about cred technology being there, analyzing the way you are typing,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the way you're using your smartphone.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You have nothing to hide.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

If you are a delinquent customer, that's when you should worry.

Tedd Huff - Fintech Confidential, Host:

an American Banker article

Tedd Huff - Fintech Confidential, Host:

that I read about Credolab

Tedd Huff - Fintech Confidential, Host:

it brought up the, the issue of, of Credit Invisibles and kind of

Tedd Huff - Fintech Confidential, Host:

their behavior in your opinion.

Tedd Huff - Fintech Confidential, Host:

How does Credolab solution address the issue of Credit Invisibles?

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Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

so credit Invisibles are a big

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

problem in, uh, globally, actually.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

in the US alone you have about 54 million credit invisibles.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You have five point five billion million Brits that are crediting visibles.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

It's not just the unbanked in India.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, um, the, the way we work allows our clients, the financial institutions to.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Understand these customers understand gig economy workers.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Imagine so they don't have a stable income like my father used to know.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

banks today, still hope you do.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

No, you, they want you to see, uh, they want you to have salary.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

But what if you are a driver for Uber or you deliver food, then

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you don't have a stable income.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

But that doesn't mean you are not credit worthy.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we are trying to change the way banks and lenders in general

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

at everybody without building biases into the assessment uh,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

because they don't have what,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

probably an older guy would think.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

That's a standard job, a normal job.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

What, what is normal today?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, it's a different millennials, they don't like credit.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So because of their personal preference towards using debit cards

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

more than credit cards, they don't generate credit history kind of data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

they automatically become thin files at credit bureaus.

Tedd Huff - Fintech Confidential, Host:

Mm-hmm.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

they may have a bank account, but

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

they don't have a credit card.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Why?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Because they don't need one or they don't like one.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Does

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

it mean they, they are not credit worthy?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

believe so.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So kind of equalize the way that any financial institution, whether

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

conventional or not, uh, look at individuals on the way they use their

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

smartphones, based on the way they type, they interact with any user interface.

Tedd Huff - Fintech Confidential, Host:

With there being this catch 22,

Tedd Huff - Fintech Confidential, Host:

in the credit worthiness I think you just mentioned with millennials

Tedd Huff - Fintech Confidential, Host:

where they have a thin file.

Tedd Huff - Fintech Confidential, Host:

How is Credolab aiming to use the behavioral data that we've

Tedd Huff - Fintech Confidential, Host:

talked about to achieve this greater financial and inclusion?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

It's simple.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We complement the existing underwriting processes that leverage

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

traditional data with behavioral data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

In other words, we don't, not advocating for banks to change the way they, uh,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

look at these millennials or gig economy workers team files in general.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We are bringing a new and complimentary type of score, type of data them to have

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a better understanding of these people.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we're not advocating for a bank to forgo the credit score.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that's important.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

That helps you, helps the bank assess the ability of a customer to repay.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Just like we're not advocating for, lenders, uh, not to use transactional

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

data like open banking kind of data played or, um, Or similar.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We are supplementing the existing assessment with a new layer that

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

sits on top of the existing layers of assessment that is behavioral in nature.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

one example I always like to do uh, imagine Tedd, you and I, we

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

have the same salary, uh, we have the same credit bureau score.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, uh, if the bank is assessing our application by using this

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

traditional means, will most likely approve both of us.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

However, from a behavioral assessment, it looks like the Tedd has a higher

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

probability to repay the loan than does.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

In other words, the by complimenting the existing traditional way of approving

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

or, uh, uh, assessing customers, we help our clients answer two key questions.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Can the customer pay back and will the customer pay back?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

bureau, uh, transactional data?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They help you answer the first question.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

to repay, uh, affordability checks.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

What about the other?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Will the customer repay?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So when you combine the two together, you have the best

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

assessment yet of any individual.

Tedd Huff - Fintech Confidential, Host:

the additional data that comes into play.

Tedd Huff - Fintech Confidential, Host:

And creating a cohesive customer experience requires all the

Tedd Huff - Fintech Confidential, Host:

players to work together.

Tedd Huff - Fintech Confidential, Host:

How is Credolab ensuring this in its operations and the product offerings?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

It's very straightforward.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We are an embedded scoring technology provider, we are embedded the front end.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

being a mobile app or a website, which, uh, thanks to Covid also,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I mean, that's perhaps one of the few good things of Covid.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Now, banks, most lenders have, uh, a mobile app for originations.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

If not, they have an app for account management or portfolio management and a

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

website to originate, uh, new customers.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So, either ways, we have a way to, uh, collect data by being embedded in that

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

very front end, and we do it in a way that doesn't generate any friction.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

uh, of course customers, the end users, they have to grant privacy

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

consent for us to access data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

but guess what?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The data is.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We, we are a data processor.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The data controller still, the bank is still the, by now pay later, player.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So, The end users have to trust the lender they are applying for a loan

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

with, they don't need to trust Credolab.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

once we get the privacy consent, then on mobiles we need to have

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the permission to access data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So there are at least two layers of security that are in full

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

control of the individual.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We cannot influence that.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Not even our clients can influence how much data end user grants us access to.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the advantage of using Credolab versus providers is that we don't

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

generate in the onboarding process.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And we also com, uh, help our clients to protect their data,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the end users to choose how much data they're actually

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

willing to give access to.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the reality is that if you are a fraudster or if you are not a genuine customer,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you will try to deny access to data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Why?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Because you're trying to, um, hinder our ability to detect you as a fraudster,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

but, uh, uh, the genuine customers have nothing to hide again, right?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the point is that we can generate a score even with a minimal data being granted,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

uh, access to, uh, from the end users.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that's part of our technologies

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we want to respect how comfortable people are to, uh, grant access to

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

data, and yet being able to deliver something predictive, uh, to our clients.

Tedd Huff - Fintech Confidential, Host:

Getting people comfortable with

Tedd Huff - Fintech Confidential, Host:

sharing that data comes around, having them understand the privacy

Tedd Huff - Fintech Confidential, Host:

and the security that goes around it.

Tedd Huff - Fintech Confidential, Host:

How does Credolab ensure the privacy and security of the data it processes?

Tedd Huff - Fintech Confidential, Host:

Given this is extremely sensitive,

Tedd Huff - Fintech Confidential, Host:

data around their financial lives.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Oh, we make no mystery

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

of the data we access.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Actually, if you go to Credolab.com, you can read exactly what data we

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

access, why we access data, how we process data, what do we do with the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

data after a financial institution terminates the agreement with Credolab.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we destroy data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Short answer.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So, we don't, we have nothing to hide.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And our privacy notice, uh, we have one for the GDPR in Europe, one for the,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

uh, California residents, uh, which is the strictest in the US for instance.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we have, but guess what?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

I'm in Florida.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Nobody cares about the C C P A, right?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The California Consumer Protection Act.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, there are few jurisdictions, uh, only a few actually.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So there is Brazil, South Africa, Indonesia, India, Vietnam.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They all require data residency.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the personal data of the data subject, basically the individual

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

must stay within the country.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

when this is a requirement, uh, we do deploy a cloud

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

instance within the country.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we don't process personal data, don't process personally

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

identifiable information.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

P i i,

Tedd Huff - Fintech Confidential, Host:

Mm-hmm.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

find it easier for our clients to

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

adopt our technology by knowing that the metadata they personalized and

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

anonymized has stored within the country.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

All of this is public information for us.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We don't make any mystery and, um, uh, and that's what our clients

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

and that's why they come to us.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Now the next step, because we are simply a data processor, is to convince our

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

clients to be as transparent in their own data privacy In their own notices that are

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

available on their websites or mobile app.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And most of them actually are quite transparent and,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

they realize that if you do process data in the right way, then there

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

is no harm in being transparent about, uh, the way you do business.

Tedd Huff - Fintech Confidential, Host:

your type of data that you're

Tedd Huff - Fintech Confidential, Host:

pulling is all behavioral, around how they use the device and the

Tedd Huff - Fintech Confidential, Host:

different devices that, that they are using, uh, that are connected to,

Tedd Huff - Fintech Confidential, Host:

I guess, their profile at Credolab.

Tedd Huff - Fintech Confidential, Host:

How should the listeners and viewers.

Tedd Huff - Fintech Confidential, Host:

Differentiate what Credolab does to determine credit worthiness versus a Plaid

Tedd Huff - Fintech Confidential, Host:

or Finicity, For a financial institution or a lender, I should say, it doesn't

Tedd Huff - Fintech Confidential, Host:

have to be a financial institution.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Plaid, and Finicity, solve a problem,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

but they don't solve all problems.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They can help you access, help you as a lender access data related

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

to the bank account history.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So they help you with the affordability checks.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They help you to understand how much loan, uh, amount particular

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

individual can afford to repay based on the analysis of the past x

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

month worth of transactional data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

guess what, there is only one single valuable data point in that

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

analysis whether or not you received your salary in the last month.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Because no matter how much you were able to repay the last 11 months, if

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you didn't get your salary last month,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you are not gonna pass the test.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So we are different from the Plaid, and Finicity's of the world because we are.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Giving a, an assessment of the user based on their behavior on the mobile.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So let, let me give you some example, Plaid, and Finicity.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They look at your disposable income.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They look at, uh, money in and money out.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They look at merchant categories.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, how did you spend the money out?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the idea uh, having access to your Spotify subscription or whether or not

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you pay for the Netflix subscription has any meaningful impact on your, credit,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

uh, risk assessment is wishful thinking.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

In my mind.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

It's just a hook, a marketing hook to, uh, to, uh, reel people in, into

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the idea of, permissioning giving you access to these type of data.

Tedd Huff - Fintech Confidential, Host:

Mm-hmm.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we look at data that is

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

already on your mobile.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

That is updated daily by virtue of using the mobile.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So imagine if we have access to calendar permission, uh, both Android and iOS.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We at metadata related to the way you are booking or scheduling, uh, meetings.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

How many people do you invite, how many calls do you have on a weekly basis?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And if you claim to be a white collar kind of on your, on your loan application,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

but then we don't see any calendar, uh, events scheduled right there.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

There may be something fishy, right, that you may want to investigate further.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

in a similar way, if we have access to context, and I say if, because not all.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And users grant us access to these permissions.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So if we have access to contacts, uh, we don't, uh, download

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the actual address book.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We don't need that.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we look at patterns, we look at how many new contacts you create per day,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

for instance, or per month, per, even during the week versus weekends, right?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

If you are a social person, perhaps you would be, uh, generating

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

more contacts over the weekend than during the work week.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

And, um, so we look at these behavioral patterns, but also.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

How many contacts are favored?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

How many have a, a custom melody, for instance, and these are behavioral in

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

natures, so your preferences different from mine, It may be correlated

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

with probability to default or not.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

but also from a fraudulent standpoint, if we noticed that week leading or

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the month leading to an application of a loan, you have downloaded 5, 6,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

10 finance apps, uh, finance apps.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So, well, we know that if you have more than 13 apps in the finance

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

category, you may be 2.6 times riskier than somebody with less than five.

Tedd Huff - Fintech Confidential, Host:

This very quickly helps me understand,

Tedd Huff - Fintech Confidential, Host:

the.

Tedd Huff - Fintech Confidential, Host:

10 million behavioral features.

Tedd Huff - Fintech Confidential, Host:

And as you go through all of these things, it really helps me

Tedd Huff - Fintech Confidential, Host:

to understand how nuanced we get in all of our mobile devices.

Tedd Huff - Fintech Confidential, Host:

And just thinking through it, like I got a new laptop and I

Tedd Huff - Fintech Confidential, Host:

set that up clean from beginning.

Tedd Huff - Fintech Confidential, Host:

So if you looked at that one versus the machine I'm on now, it's gonna

Tedd Huff - Fintech Confidential, Host:

look totally different, but there are gonna be a handful of similarities.

Tedd Huff - Fintech Confidential, Host:

And then I've got an iPad

Tedd Huff - Fintech Confidential, Host:

that has a lot of the same stuff my mobile device does, but my mobile

Tedd Huff - Fintech Confidential, Host:

phone has more on it than the iPad.

Tedd Huff - Fintech Confidential, Host:

So I can see how all of those different things come into play.

Tedd Huff - Fintech Confidential, Host:

In an ecosystem like iOS, are you able to see the interconnectivity

Tedd Huff - Fintech Confidential, Host:

between those or is it purely just on that one particular device?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We analyze behaviors.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

On each individual phone.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

uh, we don't see the connectivity between data on iOS and Android, simply because

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a customer has either one or the other.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So if you come a client of Credolab and you apply for a loan

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

through the app of the client,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

then we can look at the data of you an applicant.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Full stop.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We don't see data from other people.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

What we look for is similarities in the behaviors of delinquent customers

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

as a way to predict how, um, likely are you to miss a payment, for

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

how likely are you to be behaving in a way that is similar to a

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

confirmed fraudulent applicant.

Tedd Huff - Fintech Confidential, Host:

with Apple, there's a do not track

Tedd Huff - Fintech Confidential, Host:

device, do not track feature.

Tedd Huff - Fintech Confidential, Host:

Does that immediately make me look like a bad, , bad, uh, consumer for a loan?

Tedd Huff - Fintech Confidential, Host:

Or how do you, how are you seeing that impact the, the credibility

Tedd Huff - Fintech Confidential, Host:

of the individual with Credolabs?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, it doesn't make you

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a bad actor right away.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, you can simply be, cautious about the data you generate and

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

you want to protect your own data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

today we see about 98% of all people actually granting access to

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

permissions and the, but the main point is also that you will trust

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the financial inti institution.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

when we, uh, look at data, we look also uh, uh, X number of data points.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

It's not just you trying to hide a particular, uh, permission or

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

a particular category of data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We triangulate a lot of data points.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

today we see about 98% of all people actually granting access to

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

permissions and the, but the main point is also that you will trust

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the financial inti institution.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

we just provide lenders with insights to be able to make themselves better

Tedd Huff - Fintech Confidential, Host:

I could go deep down the rabbit hole

Tedd Huff - Fintech Confidential, Host:

in all of these technical things.

Tedd Huff - Fintech Confidential, Host:

I'm a data geek at heart, but before I ask the last question of today, I

Tedd Huff - Fintech Confidential, Host:

wanna understand, is there anything that

Tedd Huff - Fintech Confidential, Host:

you wanted to make sure that the audience understands about

Tedd Huff - Fintech Confidential, Host:

Credolab that you want to share?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Yes, the there is a misconception

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

about, uh, behavioral data or perhaps alternative data in general.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So let's go back to the basics.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

What is alternative data?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

It's a broad definition of anything that is not traditional.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

so traditional data is credit score, the application form

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

data, social demographic data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

You have.

Tedd Huff - Fintech Confidential, Host:

Mm-hmm.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

else is traditional.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So you mentioned Plaid and Finicity.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They are alternative data in the bucket of transactional data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Then you can have psychometric assessments, you can have telco,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

scores, uh, you can have, um, tax, even in some countries, lender

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

use tax data, uh, because there is no open banking framework.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So tax data helps them to understand, uh, the affordability of particular customers.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So, behavioral data is a subset of alternative data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Data has very little correlation below 5% with any of the other

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

sources of alternative data and also traditional data.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So since you're a data geek, correlation uh, high orthogonality.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

orthogonal data sets should be welcomed by anybody.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The more data you can find of that particular individual,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

better for any lender.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

At that

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

The only question becomes how much should I pay for that additional source

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

of data, for that additional score?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

that really depends on the unit economics of the lending product.

Tedd Huff - Fintech Confidential, Host:

So going into the last question,

Tedd Huff - Fintech Confidential, Host:

and this is uh, somewhat of a personal perspective question.

Tedd Huff - Fintech Confidential, Host:

If you were to give FinTech executives or startup founders that one piece of

Tedd Huff - Fintech Confidential, Host:

advice on how to build a successful company, what would that be and why?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Don't listen to VCs.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Don't

Tedd Huff - Fintech Confidential, Host:

Expand on that.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Sure.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

It's VCs are helpful of course.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

We all need a venture money.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Uh, we all need capital to grow capital, to bring an idea from being

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

just an idea into an actual product.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

However,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

the objectives of VCs are not necessarily, or not always aligned with the

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

objectives of you as an entrepreneur.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

my recommendation would be to focus on profitability rather

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

than growth at any cost.

Tedd Huff - Fintech Confidential, Host:

Fantastic.

Tedd Huff - Fintech Confidential, Host:

I love the advice.

Tedd Huff - Fintech Confidential, Host:

It is one of those things that, uh, I can see my VC and private equity

Tedd Huff - Fintech Confidential, Host:

firm friends just cringing a little bit over there, which makes me happy.

Tedd Huff - Fintech Confidential, Host:

if people wanna learn more about Credolab, if they wanna learn more

Tedd Huff - Fintech Confidential, Host:

about you, if they wanna reach out, what is the best way to get ahold

Tedd Huff - Fintech Confidential, Host:

of you to see about adding Credolab technology to their product or service?

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Happy to walk you through a demo.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Happy to discuss more how we can help, because at the end of the day,

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

what we want is to bring more people into mainstream financial services, and

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

these very people have a smartphone.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

They interact with websites.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

So, uh, we, we have a way to help you there.

Tedd Huff - Fintech Confidential, Host:

So what we'll go ahead and do is we'll,

Tedd Huff - Fintech Confidential, Host:

we'll go ahead and put all of the links to get ahold of me, Michele, as well as

Tedd Huff - Fintech Confidential, Host:

Credolab in the show notes down below.

Tedd Huff - Fintech Confidential, Host:

We'll have all that information, but if you want to make sure that

Tedd Huff - Fintech Confidential, Host:

you get direct access and find out more and get a super fast response,

Tedd Huff - Fintech Confidential, Host:

go ahead and go to www.credolab.fintechcnfidential.com

Tedd Huff - Fintech Confidential, Host:

and we'll get you directly connected with Michele and the

Tedd Huff - Fintech Confidential, Host:

rest of the team over at Credolabs.

Tedd Huff - Fintech Confidential, Host:

Michele, thank you so much for the time today.

Tedd Huff - Fintech Confidential, Host:

We dove so deep into so many different areas and you really have shed

Tedd Huff - Fintech Confidential, Host:

light on how to look at the data.

Tedd Huff - Fintech Confidential, Host:

On mobile phones in a different way on to fill in this financial inclusion gap.

Michele Tucci - Credolab, Chief Strategy Officer and MD Americas:

Grazie Tedd, this was awesome.

Tedd Huff - Fintech Confidential :

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