posted at 20:50
Author: Kia Kokalitcheva
Fri, 01 Aug 2014 03:00:07 +0000
Max Levchins Affirm speeds online check-outs, and has a hunger for data
SAN FRANCISCO - Max Levchin's new consumer lending company, Affirm, is really about data, it turns out. During a fireside chat at Mixpanel's Data Driven Conference, Levchin revealed that at the core of Affirm is the idea that there's a world of data that's not being used to estimate lending risk. Affirm differs from traditional consumer credit in that it uses a variety of data sets to assess shoppers, from available credit data to merchant's data, and even social media data. The lending industry leans heavily on the FICO score, but Levchin finds it very coarse, leaving out a lot of data that could add nuance to a borrower's risk factor. It's not even that we're suffering from a lack of data - we have a lot of it actually, Levchin believes. "Typically, as humans we make up our own story to make up for the lack of data," he said. Interestingly, Levchin's Affirm is not the only company crunching data and giving out on-the-spot online consumer credit. Paidy, which launched in Japan on Monday, is similar to Affirm, although it uses slightly different data to create Japanese consumer models, not to dynamically set interest rates for shoppers.

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