Founders of Fintern for using open banking to “fix” lending

The latest UKTN Podcast has been released now. Guests this week are the founders of fintech company Fintern, Gerald Chapelle and Dr. Michelle Hee.

Founded in 2020, Fintern provides consumer loans to those rejected by major banks. Customers link their accounts using open banking so that Fintern can “X-ray finance” and look beyond traditional credit scores.

“What this credit rating doesn’t do at all is look at your current financial situation,” said Chapel, Fintern’s chief executive. “How much do you earn? What do you spend it on? What’s left at the end of the day? And that’s the real thing that determines someone’s ability to pay.”

The company uses artificial intelligence to process data and provide loans to people with bad credit ratings, such as someone who has just moved to the UK.

During the show, the founders of Fintern told UKTN Podcast host Mark McDonough about the startup’s business model, the challenges of attracting data scientists and its mission to “fix” the consumer lending market.

“We are deeply disappointed with what is being done at the moment and we essentially believe that what we are doing will be very, very different and will change the game,” said Dr Hee.

In April 2021, Fintern raised £ 32 million in debt and own funding. Earlier this year, he raised an additional £ 8 million in a Serie A round.

The two told the UKTN Podcast about “needing loan money” and went through most of the first funding process without meeting anyone face-to-face during the pandemic.

“We were rejected by a lot of people,” Chapel said, because Fintern was “too early” for many investors.

But before that, the main focus was on attracting regulators.

“The initial problems are not really money, they are regulated,” Chapel said. “You can’t borrow a penny, no matter how much you have, until you are authorized by the UK Financial Conduct Authority as a consumer credit provider.”

Elsewhere in the show, Chapel and He discuss some of the consumer trends that Finttern is watching. This includes an increase in purchases now, payments later – which are not usually reflected in credit scores – and an increase in cryptocurrency purchases.

You can listen to all this and more in the latest episode of the UKTN Podcast and watch all the previous episodes here.

Don’t forget to subscribe to the Spotify UKTN Podcast, Apple Podcasts or wherever you catch your favorite podcasts.

The UKTN podcast is sponsored by No coverwhich provides investments without a share capital of £ 10,000 to £ 5 million to founders and companies that are changing the world.