UTU, a Decentralized trust infrastructure provider building new models of digital trust via Artificial Intelligence and Blockchain, today launched its Creditworthiness API to improve the accuracy of credit assessments for financial institutions and decentralized finance (DeFi) platforms globally.
Benefits for banks, microfinance institutions and decentralized peer-to-peer lending platforms include increased loan volumes and decreased default rates. Additionally, these businesses can now reach customers that lack credit history in new markets.
Using Machine Learning and artificial intelligence, the UTU Creditworthiness API allows institutions to monitor loans and determine the creditworthiness of both individuals and businesses by analyzing a variety of user-permissioned data points. These include historical financial information and new repayments that provide the necessary interplay to train models of high accuracy and precision, empowering lenders to make decisions with a high level of confidence.
Lenders can upload historical and other data, allowing the machine learning model to discover and learn from latent patterns in loan repayment that can then be applied to decisions on new applications. Our model continuously analyzes new repayment data to increase accuracy and performance, adapting to evolving borrowing patterns in its prediction. The Creditworthiness API is able to identify trustworthy borrower profiles and those that are at risk of default through this dynamic model.
In addition, the Creditworthiness API will work in conjunction with UTU's M-PESA Parser API to allow lenders in Africa to easily extract data, such as name, phone number, and account payment activity, from their customers' M-PESA statements. Lenders will be able to view this information on a dashboard and incorporate it into the credit scoring model.
Benefits for borrowers include the potential to borrow higher amounts with less collateral, access lower interest rates, and improved customer experience. Borrowers who use decentralized finance (DeFi) platforms may be able to access undercollateralized loans. The UTU Creditworthiness API leverages on- and off-chain data and social graphs for contextual relevance, providing qualified borrowers with the opportunity to access funding with less collateral.
For borrowers using P2P lending platforms, UTU's trust infrastructure provides a trustworthy environment that works in tandem with the Creditworthiness API to deliver personalized recommendations. They can choose lenders based on endorsements and previous activity on the Platform.
Further, UTU will build the first socially-powered credit assessment feature through which businesses can leverage social network connections to add more data to credit assessments. This extra layer of trust will differentiate the Creditworthiness API from typical credit scoring systems. P2P platforms that integrate the API will enable lenders and borrowers to see possible social connections and make better transaction choices based on who they know.
"Financial transactions are all about trust," Jason Eisen, CEO and Co-founder of UTU said, "When customers trust service providers, their loyalty and patronage grows stronger. Banks and lenders in general can only deliver confidently when they trust that the borrower will be able to pay back. We can't wait to scale the Creditworthiness API to serve more people and bridge the gap between traditional finance, digital banking and DeFi."
In the future, companies plugging into the API can extend their services to reward customers who contribute trustworthy information through tokens at no cost to them. This is powered by the UTU protocol that runs on the blockchain. The protocol will also power the UTU Trust API — the company's flagship product — which provides companies in the mobility, ecommerce and other sectors with the tools to power contextual customer reviews and endorsements.