It’s time to take big data up a notch… to BIGGER data. What, you ask, is Bigger Data? It’s a persistent stream of data that provides three-dimensional context of something important. Bigger data actually forms suggestions and provides specific action items for the future. It is the story of how payments and shipping could help get cash to a small business so it can grow. It is the way precision medicine now allows doctors to target cancer treatments on a patient-by-patient basis depending on DNA, type of cancer and overall health, rather than a general approach to all types and stages of cancer. Bigger Data can provide a clear view—by plugging in holes that were once the domain of guesswork—of a complex, fluid picture so custom solutions can be delivered directly to customers.
Data context means that rather than relying on static and outdated data points at a specific point in time, we can see the space between and around the data for the first time, filling gaps that always existed beyond our view. By understanding the value of the space between data points, we give meaning to the numbers so we can act on them. It also means precise data, addressing needs previously neglected by blanket, one-size-fits-all methods.
So what does this look like pragmatically, on the ground, every day?
Think about how outdated the credit score is in this context. Why should the FICO score of the business owner be the bellwether for the financial health of the entire business?
The new concept is simple: connect to the data sources—shipping, sales, social media clout and others—that businesses use as part of their daily activities to develop a 360-degree view of businesses and use those metrics to deliver the right level of funding to businesses at every point in their lifecycles. And since we are always connected to the data in the cloud, all decisions are instant—from underwriting through funding.
Our technology applies the Bigger Data approach to the single most important engine in our world economy—small businesses. In turn, Kabbage is like many of our small business customers—folks who wanted to be their own bosses and wanted to do something they could be proud of in the process. We’re not much different than the general store in a small town that we now provide funding to.
Small businesses are creating more and more data as they leverage technology to run their businesses via the cloud for everything from book keeping and tax software to payments records. At the same time, financial institutions have not kept pace with these technological changes and have not modified their approach to underwriting in decades. We work to leverage this explosion of data and turn it into actionable insights – the ability to provide funding to businesses based on their data. We think of this concept as the democratization of credit.
Previously, larger businesses with high FICO scores over 700 had a dramatically easier time obtaining business credit than smaller businesses. Our mission is to level this playing field by opening up credit access to small businesses of any size, empowering them to use their own data to make credit available to themselves. This is a great moment when small businesses can start leveraging data generated by the web to grow and understand their endeavors like never before.
Kabbage leverages thousands of data sources to initially underwrite small businesses for financing in minutes. The platform maintains persistent connections to these data sources to understand how these businesses progress—either positively or negatively. Kabbage’s platform is the first major innovation in underwriting to be introduced since the FICO score was launched in the 1980s.