Cignifi Uses Mobile Phone Usage to Discern Credit Risk

February 6, 2012

There’s a new predictive analytics twist in the realm of credit worthiness. Slashdot informs, “Banks Using Mobile Phone Usage to Gauge Credit Risk.” Should’ve known—everything now comes back to the phone.

Startup Cignifi focuses on consumers who use mobile phones but have no access to formal financial services. In the absence of credit histories, the company has developed software that makes credit risk predictions based on phone usage patterns. Writer Hugh Pickens explains,

The way you use your phone is a proxy for your lifestyle say the developers. ‘We’re looking at things like the length of calls, the time of day, and the location you make them from. Also things like whether you top up [a pre-paid SIM card] regularly. We want to see how stable the patterns are. When you look at that, you can create these behavioral clusters that give you information about users’ appetite for new [financial] products, and their ability to repay a debt.’

Cignifi is currently operating in Brazil, and is looking to expand to other limited banking countries like China, India, the Philippines, and Mexico. Deployment in the US is not planned anytime soon. The company is headquartered in Cambridge, Massachusetts, and has offices in Sao Paulo, Brazil and Oxford, England. In fact, it was behavioral mathematicians in Oxford who developed the technology. Go figure.

Cynthia Murrell, February 6, 2012

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.