DirectID have been shortlisted as one of 30 companies to join the FCA 2020 Digital Sandbox pilot.

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In collaboration with The City of London Corporation, The Financial Conduct Authority are piloting the sandbox to provide support to innovative firms who are tackling challenges relating to, or exacerbated by, coronavirus.

The pilot will run until early February and will focus on 3 pressing areas impacted by the pandemic:

  • Fraud and Scams
  • Financial Vulnerability
  • SME Lending

Using machine learning and transaction data, the DirectID project will highlight emerging financial distress through key indicators derived from an individual’s historical and predicted cash flow. This will aim to combat the increased risk of vulnerability in the UK and could be crucial to improving the financial resilience of consumers.

The project will incorporate several technological approaches. This will cover transaction data, categorisation, financial insights such as income verification, and cashflow modelling. Both supervised and unsupervised machine learning models will be used throughout the project.

A key feature of the pilot is building a community of interested stakeholders to interact with the teams and solutions as they are being developed in the testing environment, creating a knowledge base of shared expertise and experience.

DirectID Founder & CEO, James Varga, said:

The current definition of financial distress is largely based on post-event indicators provided by bureaus and other historical factors. While these may have been satisfactory in the past, they fail to paint an adequate picture of an individual’s current situation, or whether they are likely to fall into financial distress in the near future. Not only does a cashflow based approach to identifying financial distress offer a real-time view of vulnerability, but it also gives a more accurate insight to those who are likely to fall into financial hardship as a result of the coronavirus pandemic.

 

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