Predictive analytics can help bring the unbanked and underbanked into the mainstream, says Lee Martin, Austin Logistics executive VP for global strategic relationships.
Cape Town-based Grapevine Interactive has partnered with Austin Logistics to provide the Texas-headquartered group`s analytic solutions to the local market, focusing at first on the banking, telecoms and retail sectors.
Martin, on a visit to SA to meet industry representatives, says most organisations have robust credit risk management systems, but the majority work best after six months` data have been collected.
However, analytical tools can allow for a risk profile analysis after just one transaction using application information, demographic data and the first transaction.
Statistical modelling
The tools use statistical modelling to do this, with statistical data showing what constitutes a bad account and what constitutes a good account, Martin explains. "So if the first transaction scores a zero, you know you have a good customer. If it scores 99.9, you have a bad customer," he says.
He adds that the US also has experience with an unbanked segment of the population.
"There are about 13 million Mexicans in the US who are not citizens, and who don`t trust banks," he says. However US banks are engaged in a drive to embrace this market.
"So the tools are being used right there in the US, even in the larger banks," he says.
Martin adds that the partners are pursuing the local market aggressively. The aim is to have two reference sites in SA by the end of the year.
Austin Logistics, which also operates in Asia, Europe, Australia and Canada, counts among its customers four of the world`s top 10 banks and seven of the top 10 US credit card issuers.
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