management consultants, and Thiemann says Global Analytics was profitable from its first month of operations.
By 2008, Gopinathan saw that the company’s technology could be used as a Big Data platform for analyzing online micro-lending transactions, and Global Analytics launched Zebit in 2011. Global Analytics now serves as the parent holding company, while Zebit is the customer- and public-facing brand.
So what is the “underbanked” market?
Thiemann says a lot of financial institutions refuse to transact business with consumers who don’t have much of a financial paper trail. Many live from paycheck to paycheck, using cash and prepaid cards. They might have a bank account, but no credit card, hence the term underbanked.
“There’s not very good data about them, so it’s hard to make good decisions about transactions with the underbanked,” Thiemann told me last fall. The underbanked make up 80 percent of the market in developing countries, yet Thiemann estimates that between 20 percent and 30 percent of the U.S. population also falls into the category, including many immigrants and inner city residents.
What Global Analytics provides, primarily through its Zebit business, is a financial services system that does a better job of assessing a borrower’s ability to pay, willingness to pay, and stability, Thiemann says. After refining its online underwriting operations in England, Thiemann says Zebit plans to provide its underwriting services in several U.S. states. “We are investigating to do that on our own, and with some large partners who would like to leverage what we’ve built.”
Using adaptive data fusion, technology used previously in military and wireless sensor applications, Zebit’s online platform takes big, complex streams of data from multiple sources—including social media—to provide underwriting on a per-transaction basis. For example, a loan applicant with a Facebook account with a lot of friends poses a lower risk for fraud, Thiemann says.
In a statement today, Zebit says its proprietary platform reduces the incidence of fraudulent loans by 90 percent. Perhaps equally important, Thiemann says the technology also can be used to optimize the entire underwriting process. With this platform, Thiemann says Zebit and its partners can offer online financial products that include short-term loans and lines of credit, as well as secured and unsecured credit.
By accurately identifying and serving responsible consumers, Zebit says it can pass along savings in the form of cash back incentives and better loan terms.
After launching its business in England two years ago, Thiemann says Zebit is now the UK’s fourth-largest online lender. The company has grown to 475 staffers and contract employees, although only 25 are based at the company’s San Diego headquarters. (The other 450 are based in India.) That ratio is likely to change, though, as Zebit moves into the U.S. market.
