Marketplace lending using AI: Acredius as the ChatGPT of credit risk scoring

Although ChatGPT is well-known for using Artificial intelligence to answer your most difficult questions, the power of this technology extends far beyond that. AI and machine learning (ML) can also be harnessed to revolutionize many industries, and the financial sector is no exception. 

With the increasing availability of data and the advancements in AI and ML technologies, lenders have a powerful tool to assess credit risk and make informed lending decisions. Acredius, a leader in AI-powered lending, has been using AI to create value for its customers since 2017. In this blog post, we will compare and contrast the ChatGPT model with the Acredius AI credit risk scoring model and highlight how data and AI are changing the way credit risk is assessed.

What is ChatGPT?

ChatGPT is a large language model developed by OpenAI. It is trained on a massive corpus of public data, such as websites, blogs, and other online sources, to generate answers to written text queries. The model uses natural language processing (NLP) techniques to analyze the text and provide relevant answers.

What is Acredius AI Credit Risk Scoring Model?

Acredius AI credit risk scoring model is a proprietary AI-powered solution that assesses the credit risk of borrowers. The model is trained on diverse data sources, including public loan tapes, Acredius loan tape, and research papers data, to make predictions about the probability of default and interest rate. The model uses different regression and classification algorithms to make predictions.

Data, the Key to Accurate AI Models

The accuracy of AI models is heavily influenced by the quality and diversity of the data they are trained on. ChatGPT is trained on publicly available data, which may not represent  real-world scenarios. It is also not frequently updated and has a gap of 1 year to the accurate date. 

The Acredius AI credit risk scoring model is trained on a more diverse and representative data set, which includes loan tapes, research papers, and other relevant data sources. This results in an accurate and robust model that can make more precise predictions. These datasets are frequently updated in order to adapt the model to the most recent and representative trends within the market.

What Sets the Features Apart?

While ChatGPT and Acredius AI credit risk scoring models have similarities, there are several key differences in the features they analyze. ChatGPT focuses on language, length, and other text-based features, while the Acredius AI credit risk scoring model uses a wide range of features, beyond just financial information. This includes data on the applicant’s geographic location, industry, social media profiles, and other alternative sources. This allows the Acredius model to make a more comprehensive assessment of credit risk and provide more accurate predictions.

Bringing AI to the Real World

ChatGPT is available online, with freemium and premium options for users. On the other hand, the Acredius AI credit risk scoring model is deployed in the real world through its instant offers for borrowers, available online via the Acredius marketplace. This allows borrowers to receive credit risk assessments in real-time and make informed decisions about their financial future.

In conclusion, AI and ML have the potential to revolutionize the way credit risk is assessed. By comparing the ChatGPT model with the Acredius AI credit risk scoring model, we can see how data quality, diversity, and the use of comprehensive features can significantly impact the accuracy of AI models.

Innovating for a Greener Future

Acredius is committed to using AI and ML for the greater good. Our company has recently developed a green scoring solution in partnership with EHL, which assesses the environmental impact of loans and helps to promote sustainable lending practices. This innovative solution highlights Acredius’s commitment to using AI for positive change and its leadership in the AI-powered lending space.