Community banks need an edge when it comes to competing with their larger brethren. To meet that end they’re going after new target markets including subprime borrowers.
To mitigate the risk of lending to individuals with poor credit or those that lack a credit history, they’re increasingly turning to financial technology startups like IceKredit. The Los Angeles based fintech company provides risk management systems to banks and credit unions so they can securely and smartly offer loans to subprime borrowers. Relying on artificial intelligence and other advanced machine learning technologies IceKredit can offer financial services firm credit scores that rely on AI and machine learning, integrated enterprise risk control services, an intelligent risk decision engine, and a knowledge graph computing platform.
Founded in 2015 IceKredit is among the group of fintech startups that are bringing financial services to people who have been ignored by the big banks. It’s focused on the subprime market of borrowers who aren't covered by FICO or other credit bureaus. IceKredit applies AI to prove their creditworthiness so that they can get low-cost loans. The company partners with banks in the U.S., China, and Southeast Asia. In China, it counts Bank of China, Industrial and Commercial Bank of China, Bank of Communications and other large financial institutions as customers.
Its presence in Southeast Asia and China is drawing interest from investors, who are throwing money the company’s way. Earlier this month it raised $47 million in a Pre-Series C round of funding. The $47 million blew past the $44 million it raised in its previous rounds combined.
The round was led by Guohe Capital and included participation from Yunqi Partners. Proceeds from the capital raise will go to expand its business analytics, big data engineering, and AI teams. Some of the funding will also go for research and development and to expand to international markets. On top of all that, the fintech company is on the lookout for mergers and acquisitions to augment and enhance its offerings.
It doesn’t hurt that the company is comprised of fintech scientists and engineers from some of the nation’s biggest fintech and financial services companies. That includes ZestFinance, Lending Club, JP Morgan, Bank of America, Capital One, Discover, GE Capital, Barclays, Kabbage, Ant Financial, Tencent, Baidu. The company has two R&D labs in the U.S. and China, that included Ph.D. graduates from some of the country’s highly ranked colleges and universities.
"IceKredit is an extraordinary and technologically-affine team of business analysts and engineers,” said Yi Song, executive director of Guohe Capital. “They cultivate and motivate the relatively-unexplored application of artificial intelligence to contemporary finance. In addition, they have unparalleled experience in customizing risk management models for a variety of financial-technology enterprises. In the future, we believe that IceKredit could very well become a leader in the developing field of credit risk and credit management driven by AI technologies."