WSJ – Tuesday, March 18th – “Big Data” Doesn’t Yield Better Loans

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Much ado is made about Big Data in yielding better loans, but what does your number of Facebook friends have to do with your ability to manage your financial obligations?

In The Wall Street Journal, Elizabeth Dwoskin poses the question, “Does Big Data really help write a better loan?” New underwriting companies like LendUp and Think Finance are attempting to provide short-term, small dollar loans to those who might not otherwise qualify for a more traditional loan due to lack of credit or poor credit history.

Great idea, really bad execution. Here’s their methodology:

“Crunching numbers on everything from an applicant’s number of Facebook friends to how regularly consumers pay their cell phone bills to the number of minutes they spend completing a loan application, these companies say they can spot a good borrower without relying exclusively on information from conventional credit sources.”

It gets worse:

“Social media posts about a car breakdown could indicate a risky borrower. So can filling out an application in capital letters, said Zest Finance.” “LendUp looks at how quickly a user scrolls through the lender’s website. Users who jump to large loan amounts, without reading materials on the site, may be high-risk borrowers.”

It’s important to note that these same lenders will charge you upwards of 749% annual interest rate! But they go on to same that number is somewhat misleading, as it applies only to loans of seven days—our average annual interest rate is 220%. Really, and you think that’s good for consumers? No wonder VCs like PayPal founder, Peter Thiel and Google Ventures are all over this business model – take advantage of people who have limited options and charge ridiculous premiums.

All of these new vendors are capitalizing on a better way to measure credit worthiness outside of traditional, outdated and backward-looking credit scoring. There is indeed a much better way to measure creditworthiness and it has nothing to do with your number of Facebook friends!

It’s called G2Link, and we are not in the business of lending people money. But what we do provide is a better, more timely, and more accurate way to measure B2B trust and reputation, or creditworthiness. G2Link is revolutionizing the traditional credit industry with a social media based software platform that provides critical, real-time insight into a company’s business performance from the crowd that is currently doing business with the company. The G2Link solution platform provides clear visibility into this crowd-sourced data—creating timelier and more accurate visibility into a company’s trust and reputation. More meaningful data regarding a company’s reputation means better business decisions for you and your company. G2Link is a leader in understanding the power of the smart crowd and has built a software platform and algorithmic engine to truly measure and monitor financial performance, in real time. Banks are lining up to use the platform to help them make decisions about business loans and vendor compliance.

Instead of “friending” your Facebook buddies to drive creditworthiness, and pay a ridiculous APR, introduce them to the first trust and reputation company to truly take advantage of social media to understand risk.

Launched in February 2012, G2Link now has over 7,000 users and is tracking trust and reputation on over 90,000 companies.

G2Link Joins New York Bankers Association

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Banks adopting vendor compliance platform to manage and monitor risk

G2Link (, the first social trust and reputation software platform for banks is pleased to announce its membership in the New York Bankers Association.

“We are excited to be working with NYBA and its extended membership organization”, said Edward Sullivan, Founder and CEO G2Link. “The board at NYBA sees the value in our vendor compliance platform to help manage trust and reputation with their third party relationships and mitigate risk, in an ever increasing and expensive regulatory environment.”

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The New York Bankers Association Annual Meeting and Economic Forum – February, 2014

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NYBAWe had the privilege last week of attending the 2014 New York Bankers Association Annual Meeting and Economic Forum in NYC. In addition to promoting the G2Link Trust and Reputation platform, one of the highlights was the Economic & Market Outlook panel discussion, hosted by Ron Insana; Senior Analyst and Commentator CNBC. Joining in the discussion with Ron was Jared Bernstein, Senior Fellow, Center on Budget and Policy Priorities and R. Glenn Hubbard, Dean, Columbia University Graduate School of Business. A diverse set of topics as you might imagine, but an overwhelmingly consistent theme throughout the discussion was how do we create better visibility across the financial landscape without the burden of unnecessary and unwarranted regulation? In essence, how can the Fed expect to get regulation right when they use lagging indicators to try and predict financial crisis? “With the Fed attempting regulation without visibility, they create risky policy and even dangerous approaches to regulations that miss the mark and stifle prosperity and innovation,” said Mr. Hubbard. He went onto to say, “if the Fed was so smart, how did it not spot the housing market bubble?”

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What Makes Companies Healthy?

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Creating Trust and Lasting Reputation

Managing companies for success across a range of time frames – are requisite for achieving both performance and health – is one of the toughest challenges in business today. Turbulent economic conditions have concentrated the collective minds of many executives on pure survival. The fact that 10 of the largest 15 bankruptcies in history have occurred since 2001 is a strong deterrent to business building, playing up on its inherent risks.

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The Credit Industry Is Broken

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Why is the credit industry so hard to understand? Credit Key

Why is it shrouded in secrecy?

Why is it so expensive?

Why is the information I pay for not current?

Why do I feel like my business is always the last to know when a supplier is in trouble?

Why indeed. These questions, and others, were the same questions I asked myself prior to creating the original idea behind G2Link. What I quickly found out is that I was not alone in asking these very questions. The status quo for determining trust and reputation has not changed for decades. It’s outdated, inaccurate and expensive. Why has no one come with an alternative? No one had; so I did. It’s called G2Link.

Here are a few reasons why the industry has remained the same for years:

They make a ton of money on data. Selling data is a primary revenue source for the credit bureau industry, which had US revenue of roughly $4B in 2011, according to Consumer Financial Protection Bureau (CFPB). With data, comes power. Even though this data maybe largely inaccurate (one in five consumers has an error in their credit report), without a better methodology, we are beholden to its output – and pay big money for mis-information.

They have 200 million files on consumers. Mistakes will be made. In fact, in the last three months of 2011, 33% of credit disputes by consumers regarding an item in their file were due to errors on behalf of the credit reporting agency, according to the CFPB. In another report issued by the CFPB, only an average of 15% of these disputes was resolved by the credit agencies.

Just exactly what are you paying for? A primary reason for inaccuracy in the data is that there are actually many different “scores” that the credit bureaus are selling. The result being a score that could be “meaningful different” then the true credit score, which could result in an unfair determination of creditworthiness, or worse yet, a favorable rating when the business is going out of business.

So, what is a business to do? Use G2Link to understand and monitor in real time business performance. Business relationships are built around daily interactions between companies, suppliers and customers. Through social media based partner, vendor and supplier interactions, our algorithm uses this data to establish in real time a company’s ability to meet its obligations. By capturing these “smart crowd” interactions, G2Link has developed a software platform that measures and scores these interactions to monitor, track and predict business performance. Instead of pulling an outdated, expensive and inaccurate credit report, the team at G2Link has built a software platform that provides more timely, actionable and clearer visibility into a company’s business performance. Better insight, means better decisions. Since our journey began in February, 2012, we are now tracking over 88,000 companies and have over 5,000 users that are experiencing a better way to measure financial performance.

Stop asking why and join the B2B trust and business reputation revolution at G2Link!

Image courtesy of Stuart Miles /

Capturing Social Media and the Evolution of B2B Trust and Reputation

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Online Feedback A+++Commerce exists because one entity trusts another entity to provide a product/service, and in exchange for this product/service, the other entity agrees to pay a price/exchange, etc. In the “old days”, vendors provided references, Dun and Bradstreet issued credit reports, past personal experience and person-to-person gossip told you whom you could rely upon and whom you could not. The arrival of the Internet changed all of this – “person-to-person gossip” is now available to everyone and it’s called social media. So who can you trust?

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The Rising Tide of Vendor Risk Management

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McKinsey & Company, KPMG and Deliotte all have dedicated practices around managing vendor risk. But their recommendations stop short of capturing technology advances available today to mitigate risk. G2Link is leading these advances in risk management and many banks are now taking notice.

Banks and other financial institutions are under an increasing amount of risk as they balance their dependence on outside vendors to support their businesses, and the ever increasing need to minimize risk in a highly regulated environment. Or said more simply; financial institutions are being held accountable for the actions of their suppliers. G2Link has developed the first B2B trust and reputation platform to help these organizations gain visibility and insight into third party relationships and their business performance – quicker, more accurately, with less expense and clearer visibility.

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G2Link’s role in “The Internet of Things”

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Gartner’s 2013 Hype Cycle for Emerging Technologies Maps Out Evolving Relationship Between Humans and Machines

Gartner’s 2013 Hype Cycle Special Report provides strategists and planners with an assessment of the maturity, business benefit and future direction of more than 2,000 technologies, grouped into 98 areas. New Hype Cycles this year include content and social analytics, embedded software and systems, consumer market research, open banking, banking operations innovation, and information and communication technology (ICT) in Africa.

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Speed of Trust

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Speed, Speedy, SpeedingI recently re-read Stephen Covey’s “The Speed of Trust:  The One Thing that Changes Everything,” and in light of our recent thinking on Trust and Reputation, I would like to emphasize a few points. First, that while Trust is important on a personal level, it is absolutely critical for business interactions. Second, Trust is not static. It can go up or down with the ebb and tide of normal business but it can be proactively managed and maintained.

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Fall 2013 Release Webinar

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G2Link Fall 2013 Release - DashboardYou’re invited to join G2Link Founder and CEO Edward Sullivan to get a glimpse of what’s coming next from the number one B2B Trust and Reputation software company.

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Time To Trust

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Trust Business HandshakeBusinesses have outsourced Trust. Rather than rely on on their own criteria businesses use services to help the determine the trustworthiness of other businesses. Will they pay on time? Will they provide good service? Are they helping or hurting my company’s compliance?

In some cases, this is a matter of scale, especially in the consumer market. Macy’s for instance couldn’t possibly have a deep enough conversation with every customer prior to purchase to get comfortable so they outsource that process to the likes of Visa, Mastercard or American Express.

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Forrester Research Comments On The Need For B2B Reputation Ratings

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As the speed of business continues to accelerate, B2B trust and reputation are becoming critical in today’s enterprise.  Businesses large and small are losing faith, and dollars, in the ability of the existing solutions to provide accurate, and timely business performance information.  We’ve discussed in the past about two key ways to manage this problem — by leveraging “social” technologies and to fix the ingrained process most companies adhere to when engaging in due diligence of other businesses.  

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