Financial services companies value consumer credit data for its ability to help score credit worthiness, but proper management of that information has long been fraught with problems.
That is until distributed ledger technology came long, Sanjib Kalita said. Mr. Kalita is CEO of Guppy, a company creating and operating a distributed ledger for consumer credit data.
Mr. Kalita is a featured speaker at Urjanet’s SPARK Conference. Taking place at the Georgia Tech Global Learning Center in Atlanta on April 25 and 26, SPARK provides an opportunity to hear industry leaders share how they put utility data to work. Mr. Kalita’s presentation topic is The Changing ABCs of Data and it takes place at 3:25 PM on April 25.
With a background in both deep tech and business, Mr. Kalita is well-positioned to modernize how we work with utility data. He founded successful startups in edtech and payments, along with the successful conference series Money20/20. Along the way he also worked with a $30 billion credit card portfolio at TD Bank, an experience where he learned many of the pain points businesses have when working with consumer data.
Another formative period took place across April 2012, which Mr. Kalita opened by getting engaged and selling a company to Google in a 48-hour period. He also ended the month on a high note by getting married, but in between he ran into a problem when buying an apartment because a credit bureau mixed him up with a California woman who had a troubled credit history.
Confusing two people with similar names is but one problem with how credit bureaus manage consumer information, Mr. Kalita explained. Banks and account providers send them data and periodically those bureaus match that data to, hopefully, the right people.
Few parties have control over that process, certainly not consumers left to the whims of the agencies, or the companies buying that data who have no choice but to trust in its accuracy.
“They’re not engaged, they have no control and limited access to the data,” Mr. Kalita said. “The data is also outside of the bank’s control.”
Roughly 20 percent of credit reports contain errors, with half of those major miscues, Mr. Kalita said. That translates to limited access to financial products and higher than necessary interest rates for those victimized.
Fast forward to Mr. Kalita’s time booking speakers for Money20/20. Even through cryptocurrency was in its infancy, the buzz it created was palpable.
“Even with Bitcoin I saw its structure could be an interesting way to build infrastructure,” Mr. Kalita said. “We could distribute data to the edges rather than store it with a centralized authority.”
Mr. Kalita began to work on his own science experiment, and slowly developed a proof of concept on the Bitcoin blockchain. He graduated to Ethereum, and for the past few months has deployed a could-based Ethereum platform.
Mr. Kalita knew he was on to something but a LinkedIn post he wrote describing some of the pain points he experienced with data and how they might be solved drew a strong response.
“After the Equifax breach we weren’t ready, but I wrote a blog post on LinkedIn and within four months three of the top 10 banks reached out. To me that told me the pain points were even worse than I anticipated.”
Once its build is complete, Guppy will address those pain points, Mr. Kalita believes. The consumer tied to that data can choose which parties get access to it through the managing of permissions. If institutions want to see my data they pay me in the house cryptocurrency (which is still to be named). If additional ones want to see it, they pay me and the originating institution. That provides the institutions with incentives to maintain accuracy and the technology provides an immutable audit trail. Guppy takes a fee but the majority of the data purchase price is provided to the participants.
“I have a personal goal to push the system forward and to make things more transparent and consumer friendly for the individual,” Mr. Kalita said. “Providing greater access to financial services is something I do feel quite strongly about.”
There are plenty of additional possible use cases for the tokens, Mr. Kalita said. Perhaps companies want to offer crypto-based incentives to attract new customers. Maybe holders can obtain lower rates. On the technology side fraud detection and identity protection come to mind.
It’s still the early days, with Guppy becoming fully operational over the summer. But the future looks promising, Mr. Kalita said.
“Large organizations we’re talking to mention how consumer friendly we are and how pro consumer we are. When we’re talking about data and its control, they want their whole organization to think about it in that manner.
“We want to make the consumer look forward to looking at their credit data.”
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