Flowcast, a San Francisco-based credit-scoring startup, is working with banks to give a fintech advantage to large incumbents while also aiming to reach small businesses. Tillful, the startup’s new tool, gives small businesses a snapshot of their credit health and helps lenders monitor their risk portfolio, similar to Credit Karma.

“Banks have been using very traditional credit underwriting for decades, static financial data,” said Ken So, founder and CEO of Flowcast. “As the world moved more toward big data and more toward using AI and machine learning, we saw there was that intersection of opportunity to start innovating in this area.”

Founded in 2016, Flowcast offers its white label technology to banks and helps them use new data and machine learning to go beyond traditional credit scoring models. The tool runs on Flowcast’s credit scoring engine that uses machine learning to predict risk in SMBs. The technology pulls transactional data, accounting software data, vendor information and government filings to create a more robust credit model than that of traditional banks and help them reach a larger swathe of small businesses. The company counts Standard Chartered and ING as clients, and So said the insights gleaned from small businesses banking with these large incumbents help Flowcast’s ML technology learn and improve over time. 

Flowcast launched Tillful to get its technology into the hands of small businesses and, in turn, facilitate relationships with banks. The tool gives small businesses a way to know their standing, and gives banks an avenue to reach clients looking for relevant financial products. In the coming months, Flowcast also plans to market Tillful to lenders as an underwriting and risk-monitoring tool, what So calls “credit data-as-a-service.” The company is monetizing the tool through referral fees when SMBs choose a new financial product on the platform, and by licensing it to lenders looking to monitor SMB risk profiles.

See also: Challenger NorthOne raises $21M to solve pain points for small businesses

Flowcast’s technology emulates that of fintech lenders BlueVine and Kabbage, which compete with banks with lending models for SMBs. So said the company has raised close to $8 million so far, a sum dwarfed by its customer-facing competitors; BlueVine, for example, has raised over $767 million while American Express acquired Kabbage for $850 million during the summer. However, unlike other fintech lenders, Flowcast’s technology could benefit from the reach of large incumbents through its bank partnerships.

“We want to democratize that [technology] and make it much more available to all sorts of lenders, whether it’s the traditional lenders to the online lenders,” So said.

The 2020 Banking Automation Summit Virtual Experience, taking place November 9-10, is a new event that will provide a platform for industry professionals to share fresh insights, tools, trends and strategies. The Summit will focus on how automation will transform banking, especially with regard to back-office operations, risk management, data science and utilization, customer experience and more. Register here.