Your social networking credit score and big data

… a new generation of companies is beginning to deploy algorithms that sieve through these data to separate trustworthy borrowers from those likely to default and to price their loans accordingly. Some—like the Hong Kong-based Lenddo, which currently operates in the Philippines and Colombia—do so by scrutinizing the applicants’ connections on Facebook and Twitter. The key to getting a successful loan from Lenddo is having a handful of highly trusted individuals in your social networks. If they vouch for you and you get the loan, your select friends will also be notified of your successes in repaying the loan. (In the past, Lenddo even threatened to notify them—exerting maximum peer pressure—if you had problems repaying the loan.)

Similarly, the U.S.-based LendUp, which hands out short-term loans with high interest rates while allowing its most trusted established clients to move to more attractive longer-term packages, looks at social media activity to ensure that factual data provided on the online application matches what can be inferred from Facebook and Twitter.


Via Slate

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Crowdsourcing student loans through alumni leads to involvement by lenders

Social Finance Inc. (SoFi) is one of a handful of startups aiming to change the way student loan debt is handled. Founded by a group of Stanford Graduate School of Business alumni who graduated in 2011, SoFi offers relatively inexpensive student loans via school alumni, who also serve as a network of contacts post-graduation.
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On average, borrowers save approximately $10,000 compared to a bank loan. They also gain connections to alumni with a vested interest in their success. At Stanford, where SoFi piloted its program last year with 40 alumni and 100 students, one lender indirectly hired a borrower. Another alum put a borrower in touch with 10 contacts in his network.

Via Fast company co.exist

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Why venture capital no longer defines innovation, Innovation today isn’t occurring only among startups. It’s also happening in the funding models that help create those startups. Accelerators and crowdfunding are elbowing the “fat boys” of venture capital aside. via ReadWriteWeb.com

Why venture capital no longer defines innovation, Innovation today isn’t occurring only among startups. It’s also happening in the funding models that help create those startups. Accelerators and crowdfunding are elbowing the “fat boys” of venture capital aside.

via ReadWriteWeb.com

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Raising capital online. Crowdfunding is booming. A report by Massolution, a research firm, forecasts that $2.8 billion will be raised worldwide this year, up from $1.5 billion in 2011 and only $530m in 2009. There are over 450 “crowdfunding platforms”, including four in China, up from under 100 in 2007, with Kickstarter America’s largest. This month Indiegogo, its closest rival (though global and with a broader mix of projects), secured the biggest chunk of venture capital so far for crowdfunding. Via The Economist

Raising capital online. Crowdfunding is booming. A report by Massolution, a research firm, forecasts that $2.8 billion will be raised worldwide this year, up from $1.5 billion in 2011 and only $530m in 2009. There are over 450 “crowdfunding platforms”, including four in China, up from under 100 in 2007, with Kickstarter America’s largest. This month Indiegogo, its closest rival (though global and with a broader mix of projects), secured the biggest chunk of venture capital so far for crowdfunding. Via The Economist

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CFOs At The Center Of Enterprise Information

By: Carl Nordman, Director, IBM 2010 Global CFO Study

As the CFO and Finance builds strong competency internally, increased understanding of the drivers of business performance gives Finance a unique ability to understand the Financial consequences of alternative strategies and explanations of historical performance to help guide future decisions. 

Finance is, in many regards, the hub at which three things converge - Financial Data, Operational Data and Risk.  This unique position provides Finance the ability to develop an integrated information management and delivery system for the enterprise that combines all three  - creating a very powerful analytical platform. 

Finance’s role in determining the right analytics starts with serving as advisor and fact-based voice of reason with business constituents and the Executive Suite on what Analytics best convey the relevant drivers of business performance and the predictive qualities of various analyses. 

This reputation is historically strengthened when Finance can consistently convey two things:
1.  Finance itself is operating with strong governance, controls and standards in place contributing to the production of a single version of the financial truth
2.  Finance has a strong track record of providing meaningful and on point analytics that have proven to indeed be insightful, timely and accurate.

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The 2010 IBM Global CFO Study

Who is increasingly instrumental in helping CEOs and Boards make high-impact decisions – the choices and trade-offs that build or destroy enterprise value? CFOs.

Based on input from more than 1,900 CFOs and senior Finance leaders worldwide, the IBM Global CFO Study indicates that the demands on CFOs are rising and extend well beyond traditional financial control and supervision.

But in a constantly changing environment, how can CFOs provide their enterprises with a competitive edge? How can they help the business make not just faster but smarter decisions?

  • Driving integration of information
  • Providing inputs into enterprise strategy
  • Supporting/managing/mitigating risk
  • Measuring and monitoring business performance
  • Driving enterprise cost reduction

In the 2010 study, one group of Finance organizations – called Value Integrators – consistently outperforms their peers. They are not only more effective, but their enterprises also perform better financially.

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The Broader Enterprise Agenda: The Importance of the CFO Today

CFO and Finance’s role has been steadily increasing in prominence for the past 10-15 years.  We see more dramatic shifts or expansion in Finance’s role precipated by  economic, regulatory or industry shifts, such as we recently experienced with the Global Economic Crisis, or in the past with the Dot-Com bust, Corporate scandals and the emergence of Sarbanes-Oxley.

Most recently, the CFO and Finance’s role has expanded significantly beyond traditional Core Finance, compliance and management reporting, to address strategic and structural challenges within the Enterprise.

These things include enterprise cost reduction, escalating involvement in risk management, and more involvement in company strategy.  Because the CFO is only one person, it is essential for the CFO to develop a strong leadership team and competent analysts with strong Finance and Business acumen.  This is essential in order to increase Finance’s overall effectiveness on these broader Enterprise agenda items.

Read IBM’s 2010 Global CFO Study, the largest CFO study of its kind  featuring findings from more than 1900 CFOs in more than 81 countries. The study will be available on Tuesday, March 2nd. http://bit.ly/9D8f1Y

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