Synthesis tries out vetting by AI

Capital Appreciation’s fintech software division, Synthesis, is piloting an artificial intelligence powered credit-scoring system that scans applicants’ social media profiles and other data.

In an effort to make credit scoring more accurate, some lenders in other markets are already using this technology, including Capitec’s European associate, Creamfinance.

Capitec has said in the past it would consider adopting some of the online lender’s creditscoring tools.

Synthesis’s research and development unit began piloting the software with a local financial institution about five months ago, Synthesis MD Michael Shapiro told Business Day.

“It’s early days, they’ve done a soft launch and are moving towards a bigger launch.”

Shapiro said the AI creditscoring system used traditional credit bureau data as well as applicants’ social media and other online activity.

“We also use other information that’s provided from different sources, and then the machine learning determines the credit risk.

“Often they’ve found that they’ve started granting credit in areas where the traditional model would have said ‘no’, and vice versa. It’s just really an extension of what these credit institutions have been doing for years,” Shapiro said.

Synthesis was also piloting a blockchain solution with local financial institutions, he said. He could not give specific details due to confidentiality agreements. Similar to the internet in the early 1990s, “banks and other financial institutions are seeing how [blockchain] can be used most effectively in their operations”, he said.

“Financial institutions … are seeing the opportunity to utilise this in a way that can benefit their customers and how they operate,” Shapiro said.

Synthesis, which provides cloud consulting services to Amazon Web Services, generates about 20% of Capital Appreciation revenues.