Algorithm Improving Financial Accessibility for 1 Billion Low- to Mid-Credit Individuals in India
Now Protected by Patent
Fintech company Balancehero announced on June 18 that it has completed the registration of a patent related to its self-developed Alternative Credit Scoring System (ACS). This patent registration officially recognizes Balancehero's fintech technological capabilities and data utilization expertise accumulated in the Indian market. According to the patent classification system, ACS-related technology has been registered under International Patent Classification (IPC) and Cooperative Patent Classification (CPC), ensuring that Balancehero's unique credit scoring algorithm is protected by the patent office.
This patent covers technology that enables individuals with no income documentation, such as young adults just entering society, or those with limited credit history, to use alternative data to generate an appropriate credit score. The technology was developed to suit the local Indian environment, where many people receive their wages in cash. It has played a key role in significantly improving financial product approval rates and delinquency rates, contributing to Balancehero's annual revenue and operating profit growth of over 50% for the past five years.
Balancehero's ACS is a technology that has improved financial accessibility for approximately one billion low- to mid-credit individuals in India who lack sufficient credit history. These individuals are unable to receive financial services from traditional institutions such as banks because they have no bank transaction records or credit history to evaluate. Balancehero analyzes various payment and transaction information contained in smartphone messages (SMS) using artificial intelligence (AI) to assess creditworthiness. By expanding and advancing the use of cutting-edge AI technologies such as large language models (LLMs), the company has enabled low- to mid-credit individuals to easily and quickly access small-scale financial services.
Balancehero's ACS has rapidly expanded its presence in the Indian fintech market due to its fast credit assessment, high approval rates, and lower delinquency rates compared to competitors. Balancehero turned a profit in 2022 and achieved record sales of 144.2 billion KRW last year.
Shin Jaehyuk, leader at Balancehero, stated, "ACS accurately reflects the financial environment and user characteristics in India, and above all, through continuous upgrades using AI, we have been able to create a significant gap in both technology and performance compared to similar services. We will rapidly expand as a fintech platform through ACS, which is our core growth engine."
With this patent registration, Balancehero plans to further widen its technological lead and expand its fintech platform business. Currently, about 30% of Balancehero's revenue comes from its ACS-based platform business, and the company plans to broaden its product lineup to expand into comprehensive financial services in the future.
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