April 14, 2017
MEDICI now! Startup Stories highlights the companies that are shaping the new Financial Technology industry. Keep an eye out each week for new stories! If you or someone you know should be highlighted, send us a note. Without further ado…
Company Name: Neener Analytics
Name/Title: Jeff LoCastro, CEO/Founder
Industry Segment: Risk Analytics (Data Analytics)
Target Markets: USA, Latin America/South America, Asia
Jeff LoCastro: Sure. This is not my first rodeo. I was among other things a member of the initial executive team of the inventors of the online social network Classmates.com and was extracting insights from social media long before it became a thing. Other than the birth of my son, my biggest thrill is creating something from nothing; seeing it in my head, then seeing it manifest with other people now sharing the same dream. That is an immense source of satisfaction.
JL: Sure. I’ll give you the elevator. We’ve developed a regulatory compliant social media analytics technology to make better decisions and understand specific individual risk outcomes of thin-file, no-file and credit-challenged consumers using our patent-pending personality and behavior analytics technology. We can predict at very high rates of default, early payoff or full amortization, a risk-correlated projected fico, and a series of verification and veracity measures with only a single Facebook, LinkedIn, or Twitter login. We reduced application friction to virtually zero and provided next-gen underwriting in the same solution.
JL: Let me answer that with few stats: We live in a world where 56% of the US market alone is un-decisionable by current traditional and alternative methods; they are basically invisible. And 66% of millennials aren’t even building a history to assess. So, what if a lender could sit each customer down with a psychologist and ask them, with one click, Are you really going to pay us back? Because the question is not "can they?" the question is WILL they.
JL: The low-hanging fruit for us right now are online lenders in personal, auto, consumer products, and leasing.
JL: I like that question. Right now, for lenders, their customers are just a series of numbers. That kind of decisioning doesn’t expand markets. Back in 1940, when my grandfather bought his first house, he walked into the bank; the banker extended his hand and called him by name. They didn’t call that personalization back then. It’s just how it was. He and the banker probably saw each other at the barbecue on Saturday; they belong to the same lodge. My grandfather walked out of that bank with his loan with info that would fill a 4x6 card. Why? Because he KNEW my grandfather. I believed we could codify that same engagement using social media. And we’ve done it.
JL: I think the change in some measure will be driven by social media itself. I believe that with the coming of functional AI, we’re on the verge of seeing social media as an AI cohort – almost virtual reality avatars instead of keystrokes of ourselves. A friend of mine called me crazy for thinking that, but I think that’s the next big leap. It’s up to us to be ahead of the curve when it hits.
JL: Through a series of validations, we’ve already demonstrated we can lower defaults with one-click, but over 25%, increase revenue by 18-21%, improve collections revenue by 18-41%. So right now, we're focusing on fundraising.
JL: We are WELL beyond measuring likes & friends which is the social media solution that’s in vogue right now. It’s the you are who your friends are approach. But the problem is we’re not who our friends are. We’re who we are – as individuals, as unique sentient human beings. We decision people, not likes.
LTP: If you could change one thing that financial services people do incorrectly, what would that be?
JL: Being open to change. Almost all give lip-service to it. But instead of trying to find ways to NOT explore innovation, look for ways to test and implement on a fast track.
LTP: What keeps you awake at night?
JL: (Laugh) Literally or figuratively? Well, 15-hour days are pretty common, and weekends are a must. So when it’s time to sleep, I think training yourself to be able turn-it-off is pretty critical. But in terms of what I think about the most, it is generally, "How do we translate our tremendous scientific lead in this space into customers?" Selling. Selling. Selling.
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