Social scoring to complement credit history

by Miklos Bolza15 Nov 2017
A brand new fintech, Lodex, will allow the public to combine credit scores and an optional social score to get better rates through lenders and finance brokers.

The auction-style platform lets individuals share these scores anonymously, set up an auction from their smartphone and watch the bids come in. It will be free for consumers.

The social score is the first of its kind in Australia, measuring individuals out of 1,000 using 12,000 pieces of data compiled from the consumer’s online life. This information is gathered through an algorithm created by Lodex’s partner Lenddo with the aim to complement people’s existing credit scores and give access to credit for those who may be locked out of the market.

That Lodex allows consumers to supply a lot more information makes it stand out from other auction sites in Australia, Michael Phillipou, co-founder and director of Lodex, told Australian Broker.

“We can literally deal with any market participant and our aim is to do that: to be a complementary acquisition channel for brokers as well as lenders all done in confidence in a secure environment.”

Speaking on social scoring, Phillipou said that while the concept is new to Australia, it has been used already in many countries overseas including Singapore, India and the Philippines.

“What has been shown when used offshore is it’s a proxy for credit scoring. It’s not looking for personal information; it’s considering metadata. In order to participate, the consumer needs to give permission to the algorithm to access their primary email.”

Currently, lenders wouldn’t be considering social scores within their loan application processes as it is totally new to Australia, however Phillipou expects this to change.

“There’s plenty of evidence to suggest offshore that it’s adding a lot of value and giving more insights into a consumer and what they’re really like as a borrower.”

Lodex aims to work with lenders and demonstrate the value that social scoring can add to the loan application process, he said.

At launch, the fintech offers home loans, car finance and personal loans. It has signed up a number of lenders as well as over 80 accredited mortgage brokers. Deposits are slated to join the firm’s product offering soon.

The company has been founded by Phillipou, who has held leadership roles at Westpac and Bendigo Bank, and Bill Kalpouzanis, an industry veteran with 20 years of experience in the European banking sector. 

Lodex was launched in January this year. Most brokers have come on board in the last few months with the firm being “overwhelmed with interest,” Phillipou said.

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