Finbots.AI raises Series A funding for AI credit risk platform

Investment highlights increasing interest in AI-powered credit risk analysis

by | April 28, 2022 | bobsguide

Singaporean AI-powered credit risk specialist company Finbots.AI has raised $3 million in Series A round from sole investor Accel.

The transaction marks the first external investment raised by Finbots.AI and the first southeast Asian investment for Accel via its Fund VII.

Finbots.AI will use the funding to accelerate its product enhancement, marketing and sales, and customer support. It will also back its team expansion across its offices in India, Singapore, and Dubai.

“This new funding unlocks the next phase of growth for Finbots.AI,” said Sanjay Uppal, CEO of Finbots.AI.

He added, “Accel’s impressive track record with growth-stage companies will be a key support for Finbots.AI.”

The fintech company services banks and financial institutions with its AI-powered credit scorecard system ZScore which enables real-time application processing.

ZScore uses machine learning algorithms, utilising historical data to automatically build, validate, and deploy real-time risk models.

“The Finbots.AI team brings decades of collective experience in financial services and technology, and we see great potential and promise in their solution – ZScore – as it strives to remedy and bridge the limitations of legacy credit systems,” said Mahendran Balachandran, partner at Accel.

The Series A funding follows Finbots.AI’s meeting with the ambassadors of UAE last month to discuss possible cooperation and expansion of the company in the Gulf state.

The expansion will form part of the company’s wider plan to increase its team members to 50 by the end of 2022 and expand its reach into the rest of Asia.

Financial institutions look towards AI-powered software for efficiency and risk hedging

Accel’s investment into Finbots.AI comes at a time when more finance firms are beginning to turn to AI for risk decision-making.

According to risk provider Provenir’s latest AI survey, 50% of the respondents cited acquiring new customers as one of the reasons for investing in technology this year, while the majority (70%) wanted to prevent fraud.

Another US survey by Brighterion, a Mastercard company, and fintech media group LendIt found that 90% of the respondents were planning to make further investments in AI over the next five years.

The survey also revealed that 60% of lenders were using AI for loan origination and 42% used it for credit risk monitoring of existing customers, with more than 70% of the respondents looking to adopt these uses in the future.

Lenders move to automate with AI

In the US, Arkansas Federal Credit Union recently partnered with AI-powered credit decision platform provider Scienaptic AI to improve the financial institution’s loan decision-making process.

New York business lender Ascendus also opted for Scienaptic AI’s credit decision platform to improve its credit decision-making process.

In Europe, Lithuanian fintech SME Finance launched the AI-powered business financing service Smart Loan aimed at start-ups and SMEs for unsecured lending of up to €50,000.