Name: How SOLO is scaling trust by replacing self-reporting
Uploaded: 2024-04-10T09:49:46.405Z
Duration: 810.96

FF.INT.009_V3.mp4

FF.INT.009_V3.vtt

ENGLISH

{{00:00:04}}
Hello, everybody, and
welcome to FinTech Futures.

{{00:00:08}}
We are here today at day two of
Finovate Europe here in London, UK.

{{00:00:16}}
My name is Tyler Pathe.

{{00:00:17}}
I am a reporter at FinTech
Futures, and today I'm very happy

{{00:00:21}}
to be joined by Georgina Merhom,
the founder and CEO of SOLO.

{{00:00:27}}
Georgina, how are you?

{{00:00:29}}
Good.

{{00:00:30}}
Fantastic.

{{00:00:31}}
You, did your demo
yesterday, is that correct?

{{00:00:34}}
How did that go?

{{00:00:36}}
It was good.

{{00:00:36}}
It was very exciting.

{{00:00:38}}
Was it a quick seven minutes
or a short seven minutes?

{{00:00:40}}
It was a very quick seven minutes.

{{00:00:43}}
Yeah, We have a very complicated
offering, so seven minutes was tough.

{{00:00:48}}
Yeah, I I did get a chance to
see a few, of them underway

{{00:00:54}}
and it was all very quick.

{{00:00:57}}
In terms of SOLO, we're here to talk
about your business, SOLO, very exciting.

{{00:01:02}}
Kim, maybe you can tell us a little bit
more about SOLO, where it's based, what

{{00:01:06}}
its origin story is, and most importantly,
what's its mission in the industry?

{{00:01:12}}
So SOLO is a data infrastructure startup
from New York, and our mission is

{{00:01:19}}
essentially to build a credit bureau that
not only helps financial institutions

{{00:01:25}}
manage their risk, but more importantly
helps them assess and identify opportunity

{{00:01:32}}
and broker trust between new emerging
businesses and the financial institutions.

{{00:01:38}}
So you've come here to demonstrate
SOLO's solution with all of

{{00:01:44}}
the industry's eyes upon you.

{{00:01:47}}
Maybe you can tell me a little
bit about how the standardizing

{{00:01:50}}
of financials benefits both the
capital allocator and the business.

{{00:01:57}}
Absolutely.

{{00:01:57}}
So I'd like to answer that question
by first taking it back to how things

{{00:02:01}}
currently work as a status quo.

{{00:02:04}}
So currently, when a customer applies
for a financial product at the bank,

{{00:02:09}}
they typically will self report.

{{00:02:11}}
their information, and then there's a
third party credit check that happens.

{{00:02:16}}
Now, the self reporting
costs banks just in the U.

{{00:02:19}}
S.

{{00:02:19}}
alone 29 billion, and it costs six
to eight weeks in loan officers

{{00:02:27}}
processing applications just to verify
and standardize those financials.

{{00:02:33}}
When we talk about verification,
we want to make sure that the

{{00:02:37}}
accounting reported by the customer.

{{00:02:40}}
matches whatever's happening on a cash
basis in the bank accounts, because

{{00:02:44}}
that's the only way to verify it today.

{{00:02:46}}
So typically you'll have those
self reported books and some

{{00:02:50}}
bank statements, and then a lot
of cross checking that happens.

{{00:02:54}}
And then the third party credit
bureaus essentially just says this

{{00:02:57}}
person pays their bills, this person
doesn't, good, bad, poor, excellent.

{{00:03:01}}
And that's it, right?

{{00:03:03}}
What we are re imagining here is a
system where You have first party

{{00:03:09}}
data collection that is connected
directly to operating systems.

{{00:03:15}}
What that means is when a customer
applies for a financial product and

{{00:03:20}}
Solo is embedded in the process, instead
of asking them to self report, you

{{00:03:25}}
would essentially trigger an SDK, which
would be like a pop up that says, Hi,

{{00:03:31}}
can you please connect your account?

{{00:03:34}}
And then it would trigger them to
connect their bank accounts, their

{{00:03:37}}
billing systems, their payment gateways
maybe even their accounting systems.

{{00:03:43}}
And what would happen in the background
is, You would then go to the bank

{{00:03:47}}
and this happens once just during
onboarding and you would ask them

{{00:03:51}}
How do you want things calculated?

{{00:03:53}}
So do you want inventory if it's verified
by Amazon for example because Amazon's

{{00:03:58}}
handling fulfillment Do you want that
on the balance sheet as an asset?

{{00:04:02}}
Do you want gifts cards?

{{00:04:06}}
When they're purchased online, do
you want that to be on the profit

{{00:04:11}}
and loss as income, or do you want
it as a liability because it's

{{00:04:14}}
unearned income and it's still there's
something owed to a customer here.

{{00:04:21}}
And so all of these calculations
and custom ways of reporting

{{00:04:27}}
are decided by the banks.

{{00:04:29}}
And then you have the raw data directly
from the source mapped to that.

{{00:04:33}}
And then the bank can use
that to make decisions.

{{00:04:37}}
We think that a lot of the, data reported
by the credit bureau maybe is useful

{{00:04:42}}
for understanding risk, but it doesn't
give you a full picture to understand

{{00:04:47}}
opportunity that might otherwise
be missed or completely overlooked.

{{00:04:52}}
That's very really, interesting that
you're tapping into this process,

{{00:04:57}}
which for throughout sort of its legacy
has encountered so many roadblocks.

{{00:05:03}}
In, in terms of who your solution is
targeting you say that your initial target

{{00:05:11}}
audience really is small businesses.

{{00:05:13}}
Why was that a decision that you made?

{{00:05:15}}
So just to clarify, we service financial
institutions, their end user or their

{{00:05:21}}
end customer would be a small business.

{{00:05:23}}
And the reason we chose to build
the product optimized for small

{{00:05:31}}
businesses is we think that first
of all, 50 percent of the economy

{{00:05:37}}
currently is considered an SMB.

{{00:05:40}}
And it's when you say SMB, some banks
don't even know that some of their

{{00:05:44}}
customers are SMB because SMB goes there's
actually only 5 percent of SMBs in the U.

{{00:05:50}}
S., 33 million businesses, and only
5 percent of them are employers.

{{00:05:57}}
So when you think of business banking or
small business banking, it's actually a

{{00:06:01}}
much bigger segment than you would assume.

{{00:06:04}}
And it doesn't always look like
the kind of business you would

{{00:06:08}}
think of when you think business.

{{00:06:10}}
We're talking about digital freelancers.

{{00:06:12}}
We're talking about
digital content creators.

{{00:06:14}}
We're talking about people
with side businesses.

{{00:06:16}}
We're talking about people that
are traditionally employed,

{{00:06:18}}
but maybe consult, right?

{{00:06:20}}
We're talking about.

{{00:06:22}}
It's a very big and it's a growing
segment, but more importantly,

{{00:06:25}}
it's the fastest changing.

{{00:06:27}}
So it's not only the fastest
growing, it's the fastest changing.

{{00:06:31}}
And the opportunity we saw with the
fastest changing sector in our economy

{{00:06:36}}
is to be able to standardize their
financials so that the banks can keep up.

{{00:06:42}}
Because currently just when the banks
think they can underwrite So if you're

{{00:06:47}}
an e commerce merchant and they've worked
so hard to build a product specifically

{{00:06:51}}
for that, we're on to the next thing.

{{00:06:55}}
And there's digital assets or
there's there's all sorts of things.

{{00:06:59}}
And so we chose SMBs because we think
it's a great emerging opportunity

{{00:07:05}}
that the banks should capitalize on.

{{00:07:08}}
And then also it just happens to be very
compatible with how we're building things

{{00:07:13}}
because there's so many internal operating
systems that small businesses use that

{{00:07:17}}
we can pull data from and data that is
completely missed by the credit bureaus

{{00:07:22}}
that can help us identify opportunity.

{{00:07:25}}
The other thing is, and the last
thing that's really important is small

{{00:07:28}}
businesses have so many different
ways of doing their accounting.

{{00:07:32}}
And so it costs banks a lot to try to
standardize and verify those financials

{{00:07:39}}
You don't know if it's accruals based,
if it's cash based, you don't know

{{00:07:42}}
how operating income is calculated,
whether depreciation is in the mix.

{{00:07:46}}
You have no idea how that, SMB
is calculating their financials.

{{00:07:51}}
And so the pain point is much bigger
than for retail and consumers, because

{{00:07:56}}
with retail and consumers they get their
payroll once a month, and then they

{{00:08:00}}
get, they have their financial patterns.

{{00:08:03}}
So it's much simpler and doesn't
require a solution as complicated.

{{00:08:08}}
Yes I see what you're saying, but
to take it back to that element of

{{00:08:13}}
trust and fairness, with financial
data, it's obviously hugely complex.

{{00:08:21}}
How can SOLO ensure that the
outcomes that it produces are

{{00:08:25}}
both accurate and impartial?

{{00:08:28}}
So the way that we ensure accuracy is
we get the small businesses to actually

{{00:08:33}}
log into their operating systems.

{{00:08:36}}
If it didn't happen in a if it's not an
immutable source, we don't process it.

{{00:08:42}}
And that really helps drive trust
between businesses and the banks.

{{00:08:47}}
And then in terms of impartiality,
when you have a calculation that is

{{00:08:51}}
then applied to a million businesses
the same exact way, That in itself

{{00:08:58}}
levels the playing field because you're
relying on the data to advocate for

{{00:09:06}}
the customer as opposed to the customer
trying to get you to believe that, they

{{00:09:13}}
have stable revenues or that they're
growing or anything else, right?

{{00:09:20}}
When you have the data broker the trust,
you no longer have to rely on the customer

{{00:09:26}}
advocating for themselves or the banker
kind of being able to reason with them.

{{00:09:32}}
In terms of working with financial
institutions, these are institutions

{{00:09:37}}
with a lot of processes at play.

{{00:09:41}}
When they tap SOLO Solution, what can
they expect from the integration process

{{00:09:47}}
and the sort of service management
procedures that you can choose?

{{00:09:51}}
So we have a 13 week pilot program,
and the purpose of the pilot program

{{00:09:56}}
is to really identify What is it
that the bank is trying to optimize?

{{00:10:01}}
So we have six metrics that we track.

{{00:10:03}}
I won't bore you with them, but
the long story short is that we're

{{00:10:07}}
trying to increase revenue per SMB
customer, and then we're trying

{{00:10:12}}
to reduce the number of hours and
the cost, to process applications.

{{00:10:19}}
And we always talk about having
the application to decision

{{00:10:24}}
process go from months to minutes
and we really stand by that.

{{00:10:28}}
And during the 13 week implementation
process, we actually measure

{{00:10:34}}
it within the first 13 weeks.

{{00:10:37}}
And if there is no substantial
improvement, then no commitment.

{{00:10:43}}
And so we think that's very
important for us to be able to

{{00:10:45}}
build trust with the institutions.

{{00:10:48}}
A little bit of try
before you buy, really.

{{00:10:50}}
Absolutely.

{{00:10:51}}
Yeah.

{{00:10:51}}
I think that's really fascinating.

{{00:10:53}}
In terms of fascinating, this
has been a fantastic conversation

{{00:10:57}}
to have with you, Georgina.

{{00:10:58}}
I've really enjoyed speaking with you
and learning more about SOLO Solution.

{{00:11:02}}
In terms of a business with so much
momentum and potential, what can we

{{00:11:08}}
expect Solo to do in 2024 and beyond?

{{00:11:11}}
SOLO is building towards becoming
the first credit bureau that

{{00:11:15}}
commoditizes first party data.

{{00:11:19}}
The credit bureaus today are not
reporting on any of the data that we

{{00:11:25}}
think is relevant for the next generation
of both businesses and consumers.

{{00:11:31}}
We think that the data
is widely irrelevant.

{{00:11:33}}
We also think there is room to,
Commoditize first party data, both for

{{00:11:39}}
decisioning when it comes to financial
institutions, but also be able to

{{00:11:44}}
reward consumers for providing access
to that data to the credit bureau.

{{00:11:51}}
And in terms of what those
rewards would look like, can you

{{00:11:54}}
tell us a bit more about that?

{{00:11:56}}
People would get paid for
their first party data.

{{00:11:59}}
Which essentially paves the way
for a universal basic income.

{{00:12:04}}
And there's been several attempts by
consumer startups to accomplish this.

{{00:12:10}}
And we think the issue with that is
they're not in a position where the data

{{00:12:16}}
they collect is used for a decision.

{{00:12:19}}
And so it's great, it's proven that
users are willing to authenticate

{{00:12:25}}
access to their first party data and
essentially sell it to decision makers.

{{00:12:31}}
The issue has been that the
people that are attempting to sell

{{00:12:34}}
that data are just not able to
leverage it for decision making.

{{00:12:39}}
And because of our reporting engine, and
the fact that we've already commercialized

{{00:12:44}}
our product, and we know that banks
are going to pay for it, we think that

{{00:12:47}}
credit bureaus are the best positioned
to commoditize first party data and and

{{00:12:54}}
pave the way for universal basic income.

{{00:12:57}}
That universal basic income element,
I think, is really intriguing.

{{00:13:01}}
And it'll be very, interesting to see you
at Finovate again next year to discuss

{{00:13:06}}
how those plans have come into fruition.

{{00:13:09}}
But, Georgina Merhom, the founder and CEO
of SOLO, it's been fantastic to meet you.

{{00:13:15}}
so much.

{{00:13:17}}
to all of our viewers online.

{{00:13:19}}
And if you'd like to find out more,
please head to fintechfutures.

{{00:13:23}}
com.

{{00:13:23}}
Until next time, I'll see you soon.

{{00:13:25}}
Thank you.

Hello, everybody, and
welcome to FinTech Futures.

We are here today at day two of
Finovate Europe here in London, UK.

I am a reporter at FinTech
Futures, and today I'm very happy

to be joined by Georgina Merhom,
the founder and CEO of SOLO.

You, did your demo
yesterday, is that correct?

Was it a quick seven minutes
or a short seven minutes?

Yeah, We have a very complicated
offering, so seven minutes was tough.

Yeah, I I did get a chance to
see a few, of them underway

In terms of SOLO, we're here to talk
about your business, SOLO, very exciting.

Kim, maybe you can tell us a little bit
more about SOLO, where it's based, what

its origin story is, and most importantly,
what's its mission in the industry?

So SOLO is a data infrastructure startup
from New York, and our mission is

essentially to build a credit bureau that
not only helps financial institutions

manage their risk, but more importantly
helps them assess and identify opportunity

and broker trust between new emerging
businesses and the financial institutions.

So you've come here to demonstrate
SOLO's solution with all of

Maybe you can tell me a little
bit about how the standardizing

of financials benefits both the
capital allocator and the business.

So I'd like to answer that question
by first taking it back to how things

So currently, when a customer applies
for a financial product at the bank,

their information, and then there's a
third party credit check that happens.

Now, the self reporting
costs banks just in the U.

alone 29 billion, and it costs six
to eight weeks in loan officers

processing applications just to verify
and standardize those financials.

When we talk about verification,
we want to make sure that the

matches whatever's happening on a cash
basis in the bank accounts, because

So typically you'll have those
self reported books and some

bank statements, and then a lot
of cross checking that happens.

And then the third party credit
bureaus essentially just says this

person pays their bills, this person
doesn't, good, bad, poor, excellent.

What we are re imagining here is a
system where You have first party

data collection that is connected
directly to operating systems.

What that means is when a customer
applies for a financial product and

Solo is embedded in the process, instead
of asking them to self report, you

would essentially trigger an SDK, which
would be like a pop up that says, Hi,

And then it would trigger them to
connect their bank accounts, their

billing systems, their payment gateways
maybe even their accounting systems.

And what would happen in the background
is, You would then go to the bank

and this happens once just during
onboarding and you would ask them

So do you want inventory if it's verified
by Amazon for example because Amazon's

handling fulfillment Do you want that
on the balance sheet as an asset?

When they're purchased online, do
you want that to be on the profit

and loss as income, or do you want
it as a liability because it's

unearned income and it's still there's
something owed to a customer here.

And so all of these calculations
and custom ways of reporting

And then you have the raw data directly
from the source mapped to that.

And then the bank can use
that to make decisions.

We think that a lot of the, data reported
by the credit bureau maybe is useful

for understanding risk, but it doesn't
give you a full picture to understand

opportunity that might otherwise
be missed or completely overlooked.

That's very really, interesting that
you're tapping into this process,

which for throughout sort of its legacy
has encountered so many roadblocks.

In, in terms of who your solution is
targeting you say that your initial target

So just to clarify, we service financial
institutions, their end user or their

And the reason we chose to build
the product optimized for small

businesses is we think that first
of all, 50 percent of the economy

And it's when you say SMB, some banks
don't even know that some of their

customers are SMB because SMB goes there's
actually only 5 percent of SMBs in the U.

S., 33 million businesses, and only
5 percent of them are employers.

So when you think of business banking or
small business banking, it's actually a

much bigger segment than you would assume.

And it doesn't always look like
the kind of business you would

We're talking about
digital content creators.

We're talking about people
with side businesses.

We're talking about people that
are traditionally employed,

It's a very big and it's a growing
segment, but more importantly,

So it's not only the fastest
growing, it's the fastest changing.

And the opportunity we saw with the
fastest changing sector in our economy

is to be able to standardize their
financials so that the banks can keep up.

Because currently just when the banks
think they can underwrite So if you're

FinTech Futures

Expert Insight

Amid the hustle and bustle of FinovateEurope 2024, we had the opportunity to sit down with Georgina Merhom, founder and CEO of Solo, to discuss how the New York-based data infrastructure start-up is enabling financial institutions to capitalise on their data collection processes.

In our video interview below, we discuss:

· How Solo's technology enables banks to identify new opportunities through autonomous data reporting.

· The benefits of financial standardisation for capital allocators and the scope of Solo's data aggregation.

· Its journey towards building a credit bureau that commoditises first-party data and how this is set to establish a universal basic income.