Trade Ledger™ integrates Wiserfunding to advance complex commercial risk assessments
Trade Ledger™ adds new level of credit risk mitigation through Wiserfunding integration
By embedding the solution into Trade Ledger’s loan origination and management portals, customers will now be able to use the score for the most accurate underwriting and ongoing risk assessments.
LONDON, 10th March, 2020 – Trade Ledger™ and Wiserfunding today announced a partnership that allows banks and alternative finance providers to more accurately assess their mid-market commercial customers for secured and unsecured credit. Trade Ledger™, the specialist mid-market commercial Lending-as-a-Service platform, confirmed that Wiserfunding’s leading business credit score, the SME Z-Score, would be made available within both their loan origination and management portals, to help their rapidly growing client base access the fastest and most precise business credit score available.
Roger Vincent, Chief Innovation Officer at Trade Ledger™ said,
“Inaccurate and slow credit risk assessment, for SME commercial loan requests is one of the major reasons that over 50% loans are currently declined by financial institutions (FIs). This has created a £1.2 trillion global credit gap and is stunting economic growth and social mobility.”
“To address this issue risk assessments must be exceptionally accurate and utilise unstructured,
as well as structured, big data inputs and machine learning techniques in this continually evolving environment. Wiserfunding, uniquely does just that, but offers the reassurance of the best of academia and its established client base, while drastically reducing the time taken to underwrite counterparties.”
Gabriele Sabato, CEO of Wiserfunding highlighted that
“Trade Ledger™ were the perfect fit for our credit risk assessment solution. As one of the fastest growing lending technology providers in the world, their data-driven approach to commercial lending provides the ideal platform for underwriting and portfolio management teams to accelerate their risk management capabilities. With Wiserfunding’s SME Z-Score embedded within the platform, these institutions can now start to think about more advanced segmentation, automation and straight-through-processing, advancing the accuracy to record levels and profiting from this hugely underserved market.”
The new global partnership will aim to target mainly mid-market lenders and banks, who have traditionally used manual risks assessments to identify high-risk customers. The score is tailored specifically for SMEs with revenue between £500K and £200M. On average, the score delivers between 83% and 95% default prediction accuracy, 20-30% higher than other than other industry benchmarks in this space.
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About Trade Ledger™
Trade Ledger was founded in 2016 to help the financial services sector re-imagine commercial lending for mid-market corporates in the new digital economy. Our Lending-as-a-Service (LaaS) platform enables banks and alternative finance providers to automate their commercial lending operations at scale. Utilising a suite of pre-built components, our fully configurable, white-labelled, end-to-end platform supports all secured and unsecured commercial lending products. It uniquely takes new structured data sources from the supply chain and transforms them into actionable insights and tasks, enabling the right lending products to be created and offered at the right time, over the right channel, quickly, at low risk. This allows our clients to boost profitability; realising on average a 60% origination cost reduction, a 50% reduction in drop-outs and loan book growth of 300%. Based in the UK and Australia and having raised £1.5M from investors including Hambro Perks in 2019, we are currently expanding elsewhere within Europe and APAC to accommodate our fast-growing client base.
Visit www.tradeledger.io for more information.
Wiserfunding enables traditional and alternative lenders to better allocate funds to SMEs, helping them to build their assets, lend money in a risk-managed way, and reduce the cost of acquiring new customers. By accessing more comprehensive data to show which companies will likely generate long term value, lenders can achieve their mandate of lending funds to UK small businesses whilst not over-leveraging themselves. Building on the Z-Score model, which has stood as the industry standard for 50 years, Wiserfunding uses Artificial Intelligence to assess intangible factors such as corporate governance, management capacity and macroeconomic outlook. Wiserfunding’s platform requires just a company number to get started and is managed by a team of risk experts. The platform provides a 12 month probability of default and uses a proprietary Bond Rating Equivalent method to ensure that risk assessments are comparable across industries and markets.
By informing better lending decisions, Wiserfunding helps lenders support the backbone of the UK economy and mitigate the risk of a credit bubble by reducing default rates. Alternative lenders, whose lending practices are under close scrutiny, can build their loan books and generate credibility with their own investors through mature risk management. SMEs themselves can better understand their risk profile and take decisions that will help secure funding for their business.
Wiserfunding is co-founded by Edward Altman, Professor of Finance at New York University’s Stern School of Business and a leading academic in distressed debt markets; and Gabriele Sabato, former Head of Risk Appetite Portfolio Decisioning at RBS.
Visit www.wiserfunding.com for more information.