'Robo-advice' could help banks predict creditworthiness - HollandFintech.com

Robo-advisors are currently a prominent topic in fintech as they are disrupting the wealth management industry with their easy-to-use low-cost passive investment management service, which has grown in popularity amongst investors. However, 'robo-advice' is no longer just specific to the wealth management industry. According to Diederick Van Thiel, co-founder of Dutch fintech company AdviceRobo, banks could also use'robo-advice' to predict the creditworthiness of its customers, through the use of artificial intelligence and machine learning. This could be especially beneficial for challenger banks that tailor their services primarily towards millennials who may have limited credit history or no credit score at all. In this case, using the traditional model of assessing a customers credit risk, by taking into account 16 variables of structured data, would not be an effective way of predicting a customer's credit risk.