Used by big lenders like Bank of China and Minsheng Bank, CraiditX's solutions can gauge consumer default risk even if a user has no credit history
In 2015, China Minsheng Bank was searching for a fintech company to upgrade its data system for risk control purposes. The bank reached out to a few firms, providing them with sample data from credit card users and asking them to identify the ones likely to default on payments. Newly founded AI startup CraiditX beat the other firms with its assessment to clinch the contract.
To execute the upgrading project, eight CraiditX technicians spent half a year at the bank’s headquarters in Shunyi District in Beijing. Their efforts paid off. Soon after, two other big banks, Bank of China and China Merchants Bank, approached the startup too, eventually
The recognition from these big-name clients and word of mouth have helped CraiditX attract more clients. As of now, the startup has served more than 100 financial institutions from the banking, consumer finance, securities and insurance sectors.
The startup's technical competence was the key to its initial success, but CraiditX founder Zhu Mingjie is aware that timing also played a role.
“It was a once-in-a-lifetime opportunity for us
“If it were now, it would be near-impossible for a young company like ours to secure the sector's top players as our clients, given the number of mature, AI-based risk control companies around.”
AI expands risk assessment capability
Prior to founding CraiditX, Zhu had worked as a data engineer at a slew of internet companies and felt the disruptive force the combination of big data and AI brought to traditional industries, especially finance.
“I have never come across any sector quite like finance, where a large volume of data can generate such a high value. Finance, in essence, is an industry of data,” he said.
CraiditX targets mainly businesses providing consumer credit services in China, a market which is projected to be worth more than RMB 45tn in 2020.
Financial institutions are unable to assess the credit risk of
To address this issue, CraiditX
From the very beginning, Zhu has made it very clear that CraiditX will not engage in banking or any other financial services as he believes that division of labour is key in the B2B market.
“Our job is to assess a user’s risk factor. Whether to
In order to do so, CraiditX has been improving its offerings continually. When it worked with Minsheng in 2015, it took the startup half a year to build an effective AI model for the bank. By late 2018, CraiditX had launched its second-generation AI engine, reducing the time taken for the modeling process to two to four weeks.
Zang Suyang, the founding partner of Volcanics Venture which participated in two of CraiditX's funding rounds, believes AI will take over most data analytics jobs in time to come.
“CraiditX is helping prepare the finance industry for the future,” he said.
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