Assaf Binstock, Co-Founder and CEO of credit scoring platform BeeEye, chatted to us in Tel Aviv about how the company is revolutionising money lending, and why Israel is such a hotbed of tech innovation.
Tell us about BeeEye. What is it you are trying to do?
First of all, what is a bank? A bank is an institution to which people give their trust – it’s got customers and means of distribution, and it has years of customer data stored up. It’s supposed to specialise in two things – the selling of financial products, and risk evaluating for its customers. Beyond that, there is not much else.
We’re coming from a place of combining the question of who the customers are with the quality of the underwriting which is given to them. Banks are still using relatively traditional sources for information – unsophisticated and lacking in data, and, even though they often have the information internally, it stays buried in the basement and not used. Therefore, the decisions they end up making about their customers are not optimal. People who qualify for a loan don’t get enough credit, and good people, who the bank can benefit from lending more money to, and they in turn can benefit from receiving more credit, are being left out.
We come from this industry and we identified that we have the ability to take information and connect it to the customers the bank has. Whether it’s connecting different information stores within the bank about a specific customers, or acquiring information from third party Introducing BeeEye sources or from the public web itself (like, for example, public information from the UK government). We then analyse all of the information and give a credit scoring based on it.
So, the ability to create this model about all of the customers, and to explain how it all works and why certain decisions are reached (which is another thing we do), and to do it to scale for millions of people, that is what makes BeeEye different.
Do you think this will contribute to financial inclusion?
Yes. Credit is a vessel of social mobility – it’s a great thing. That’s not the original purpose for which we set up the company, but it can certainly help.
The startup and fintech scenes in Israel are very strong. What do you think are the contributing factors to this?
I think there are two points that make Israeli engineers so unique. One is the high level of intellectual focus in the country – education is very important. We have the Technion, and the army. Plus, a lot of people start gaining experience at a very young age – there’s widespread early adoption for tech that comes into the country. Another thing is a lack of fear of breaking conventions, and the ability to try and find out whether things that didn’t work elsewhere might work this time round. The combination of a good engineer, who has the professional know-how to do things without fear, creates a very good foundation for groundbreaking work.
From an entrepreneurial perspective, it’s easy to build up an early-stage startup here. Whatever field you can think of, there will be at least 10 companies doing really amazing things.
So the infrastructure’s good? There’s support, funding, a sense of community?
There’s good early-stage funding – there are a lot of private investors. Later, when you go into the growth stage, there’s an increasing number of funds available. That said, we’re not necessarily looking for Israeli investors – we’re open to American, British and European funds. We also have Asian investors looking into our company. This kind of funding will help us with the next stage, which is expanding globally.
What do you think the future of AI looks like?
I believe more and more banks, credit card companies and lenders will adopt AI and machine learning technology, in order to perform smarter underwriting. As a result, the credit offer people will get will be more suitable to their abilities. This will eventually lead to a greater opportunity in the market for different players to receive credit, and the consumers are ultimately going to benefit from this.
And the future of financial services as a whole? Do you think banks will disappear?
No. I think for the foreseeable future, banks are the one that are going to manage money globally, not P2P networks. But they will go through a transformation, and will become organisations driven much more by data and technology, and less by physical branches, size and tradition. What the vision for BeeEye? The ability to bring the highest level of data-science technology to as many leading companies in the industry, and to upgrade the core of the banks with our technology. It’s a huge undertaking. It will take years, but it will be very significant.