Algoan: Providing fairer, faster lending processes with machine learning and Google Cloud
About Algoan
Algoan helps banks and other financial institutions to offer fully automated lending processes tailored to their customers’ individual financial needs. Using open banking data and machine learning technology, Algoan provides faster loan processing with greater understanding of customers’ needs.
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Contact usWith Google Cloud and its own machine learning algorithms, Algoan has built a platform for financial companies that simplifies credit scoring processes and makes applying for loans easier.
Google Cloud results
- Tailors loan application decisions to individual customers with machine learning technology running on Google Kubernetes Engine
- Keeps sensitive financial data secure and confidential with Google Cloud and its extensive compliance certification
- Provides consumers with a free app to aid their financial planning during the COVID-19 quarantine
Lending decisions now finalized in five mins, not five days
Credit is the life-force of any financial system, but for banks and other financial institutions, making credit available to those who need it can be something of an art. The credit scoring models used by financial companies don’t always reflect the way we live, work, and spend money. “In France, banks and lenders often base their lending decisions on outdated socioeconomic factors, such as whether a loan applicant is married or not. That’s not a precise measure of how secure a customer might be,” says Laurène Huet, Chief Marketing Officer at fintech startup, Algoan. “We want to make credit scores more transparent and more representative of the applicants’ actual financial behavior rather than demographic signifiers.”
“As an industry, financial services has very demanding standards for security and availability. We needed an infrastructure that was state of the art, had the highest levels of security, and the best possible support. For us, that was Google Cloud.”
—Fabrice Ongenae, CTO, AlgoanLaunched in 2018, Algoan provides financial institutions with a digital platform designed to improve their lending decisions by making them faster and more relevant to the circumstances of each customer. The platform has already proved popular with France’s most well-known financial companies including Franfinance, a subsidiary of Société Générale, and Cofidis, as well as lenders in Belgium and Spain. Taking advantage of the recent move to “open banking,” Algoan’s product combines cutting-edge data analytics and the highest standards of security to provide lenders with a fair credit scoring system based on actual transaction data. To do that, it needs an infrastructure like Google Cloud which balances the need for power, stability, and security.
“As an industry, financial services has very demanding standards for security and availability,” says Fabrice Ongenae, CTO at Algoan. “We needed an infrastructure that was state of the art, had the highest levels of security, and the best possible support. For us that was Google Cloud.”
Delivering “open banking” that’s focused on customers
In 2018, the European Union’s revised Payment Services Directive (PSD2) came into effect, allowing banks and financial companies to share (with their customers’ permission) transaction-level data with third parties. The goal was to make the financial services industry more transparent, more innovative, and, ultimately, more customized to consumers’ needs.
Algoan was at the forefront of this wave of “open banking” and saw an opportunity to overhaul the lending system of the French financial industry. Combining the agility of a startup with the expertise and experience of credit industry veterans, the company worked on applying cutting-edge data analytics and its proprietary machine learning algorithms to the wealth of new transactions data.
For such a specific platform with unique needs, the company built its technology around Kubernetes, the container technology developed at Google. Being open source, Kubernetes can work with any infrastructure provider, but after evaluating its options, Algoan found Google Kubernetes Engine (GKE) to have the right combination of security, power, and ease of use.
“Around 80% of our workload runs on Google Kubernetes Engine. It gives us the freedom to work with open source technology and customize our tools. It also takes care of the maintenance and management overhead so we don’t have to do that all by ourselves.”
—Fabrice Ongenae, CTO, AlgoanAlgoan’s credit solution is white-labeled, which means that it is designed to slot into any bank’s existing product range with minimal disruption. The core of the platform is the Algoan Decision Engine (ADEN). When a bank’s customer asks for a loan, rather than have them fill out a questionnaire, ADEN takes that customer’s transaction data and applies its proprietary machine learning algorithms. The transaction data forms the basis of a credit score, which is much fairer and more personalized than the traditional demographic methods because it is based on the customer’s actual financial behavior. As well as ADEN, the company also provides solutions for due diligence, debt servicing and a fully customizable chatbot.
For Algoan, GKE is what makes the platform work so well. Almost all of the company’s technology is proprietary and built on Kubernetes instances. The mature orchestration service provided by GKE helps to keep things running smoothly, allowing the developers to work in the way that they want to.
“Around 80% of our workload runs on Google Kubernetes Engine,” says Fabrice. “It gives us the freedom to work with open source technology and customize our tools. It also takes care of the maintenance and management overhead so we don’t have to do that all by ourselves.”
Algoan also uses Cloud CDN for a smooth user experience, Google Cloud operations tools for logging and monitoring, and Identity-Aware Proxy for controlling access and administration. When the company began working with Pub/Sub to manage its event publishing, Google Cloud Technical Account Management proved invaluable for setting that up quickly and with minimal fuss.
“With Google Cloud, we have built an infrastructure that can bring together every customers’ transaction data and run our models on it very quickly. It means they can get credit scores in minutes, not days, and they will be much fairer than simpler demographic models.”
—Fabrice Ongenae, CTO, AlgoanFairer decisions, delivered faster
Powered by Google Cloud, Algoan’s solution offers banks and lenders a clear, simple digital lending platform with plug and play, white-labeled products. The sheer power of the platform enables credit scores to be calculated in a clearer, more transparent way than before, and much faster. Traditional credit checks often take days, creating unnecessary worry for customers. With Algoan, they’re informed within five minutes of their application and can be sure that the decision is based on a much more relevant set of criteria.
“With Google Cloud, we have built an infrastructure that can bring together every customer’s transaction data and run our models on it very quickly,” says Fabrice. “It means they can get credit scores in minutes, not days, and they will be much fairer than simpler demographic models.”
Meanwhile, along with the added customization and convenience of the platform, Algoan and its customers benefit from the high levels of security that come with Google Cloud, including certification for rigorous compliance protocols such as PCI-DSS and SOC 1/2/3.
Bringing stability to consumers in uncertain times
While Algoan’s platform is for financial lenders, in early 2020 the COVID-19 situation spurred the company to look for new ways to help borrowers more directly. Recognizing that lockdown procedures would temporarily have an impact on finances, Algoan created a new, free product for consumers, using the company’s algorithms to predict exactly how their finances would change in the short and medium terms, and bringing some clarity to their financial planning. The product provides clear documentary evidence of a borrower’s financial situation and helps them to renegotiate their loan arrangements to the best advantage of both parties. Working hard to adapt the core business logic to this new venture, Algoan unveiled its new product in just two weeks.
Looking ahead to the medium and long term, Algoan intends to use Datalab and BigQuery to boost its data handling capabilities and look for new insights. More strategically, the company is planning a move into more countries across Europe in late 2020 with Google Cloud at its core. “We’re always looking for new ways to work with Google Cloud and improve on what we already have. Right now, we’re also preparing to expand internationally, so we need a solution that can scale with us,” says Fabrice. “I think Google Cloud does that job very well.”
Tell us your challenge. We're here to help.
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About Algoan
Algoan helps banks and other financial institutions to offer fully automated lending processes tailored to their customers’ individual financial needs. Using open banking data and machine learning technology, Algoan provides faster loan processing with greater understanding of customers’ needs.