A Singapore-based blockchain-powered startup called Points, which uses AI and big data to calculate credit scores, is looking to change the way people access banking services.
Blockchain Is Solving the Problem of Credit Checks
Kate Shen and Sarah Zhang, co-founders of Points
(Source: Tech in Asia)
Securing loans from financial institutions is a complex and tiresome endeavor, especially for people with little or no loan history. Purposefully or not, traditional banking models exclude young people and people with no banking history from the financial system, which is a problem many emerging fintech companies want to solve.
One of those companies is the Points, also called PTS. Founded in 2017 by two Amazon and Xiaomi alums, Sarah Zhang and Kate Shen, the Singapore-based company is looking to revolutionize the way people access banking services.
According to Tech in Asia, Points uses AI and big data to assess factors like an individual’s occupation, bill payments, and shopping activities to calculate a credit score. And while there are many other companies racing to close the gap left by the credit industry in Asia, PTS has one significant advantage over them – it addresses the issue of security.
The 2017 data breach that happened at Equifax, one of the largest agencies in the world used to run credit checks, exposed sensitive personal information of more than 140 million U.S. citizens, raising questions about the safety of such institutions.
One of the main advantages PTS has over its competitors is that it doesn’t actually store customers’ data. Banks usually need to upload borrower profiles as part of the vetting process, which is a time-consuming process that takes up a lot of storage space.
PTS’s Blockchain Makes Leaks and Hacks Virtually Impossible
PTS’ protocol is built on top of Ontology, a public blockchain project users can submit their information to. The protocol then calculates the user’s credit score based on that input as well as data from credit bureaus that PTS has partnered with, Tech in Asia reported.
The protocol acts as a secured highway and doesn’t actually store the user’s information, limiting the chance of a security breach during the calculation process. In October, the company partnered with Oasis Labs, a smart contract platform that will help them do more research into secure computation.
However, gathering and protecting data still remains the company’s biggest problems. “The sheer amount of data input is huge – 80 kinds of variables from 500 million consumers,” Zhang, one of the company’s co-founders, explained. “Even if someone did attack the system, the blockchain encryption keeps hackers from deciphering what they’ve found,” she added.
She also said that the protocol has a system in place to “punish data leakers,” so even if some of its data gets leaked, the company is able to analyze the problem and know whose information was exposed.
The company’s product is already up and running with three different applications in China – PTS has a nationwide KYC partnership with Teleinfo, a credit rating application with Zhong Cheng Xin Credit Technology, and Coinsta, an Android wealth management service.