Online consumer finance platform LexinFintech Holdings Ltd. has grabbed The Asian Banker‘s award for best lending technology in China.
The NASDAQ-listed fintech platform received the 2019 award for Best Lending Technology Initiative, Application or Programme in China from The Asian Banker.
“The technology combination of big data and artificial intelligence (AI) adopted by Lexin to assess customers’ creditworthiness has enabled the company to develop a risk management system that can automatically handle 98% of all loan applications while maintaining a charge-off rate of under 2%,” said The Asian Banker.
Hawkeye, Lexin’s proprietary risk management system, is capable of generating credit assessments of individual clients within seconds by assessing over 1,000 decision rules and 7,500 data variables.
The company’s Wormhole system then connects approved loan applications to over 100 financial institutions that have entered partnerships with Lexin, helping to cut their manual approval processes.
These fintech innovations have helped to reduce Lexin’s loan review staff by 40% over the past several years, while also driving a 70-fold increase in loan application numbers.
For clients the process means they can obtain funds within a matter of minutes after submitting online applications, as compared to a timeframe of several weeks with conventional lenders.
Lexin also employs an AI-driven anti-fraud technology called Complex Networks to assess fraud potential by scrutinising metrics including shared devices, Wi-Fi networks, contact lists and User Behaviour Risk Analysis.
The fintech platform claims that its systems have eliminated all forms of organised fraud involving more than 50 participants since the start of 2019, as well as prevented more than 2,000 fraud cases in 2018, cutting losses by over 30 million yuan per month on average.
As a consequence Lexin has managed to keep its credit quality in fine fettle, with its 90 day+ delinquency ratio at just 1.42% as of 31 March, 2019.
Lexin’s IT cost per loan application is just 10% that of traditional financial institutions, while its operating expenditure as a share of its loan balance has fallen from 17.3% in 2015 to 4.5% in the first quarter of 2019.
In the first quarter of 2019 Lexin’s R&D expenditures also increased by 37.8% YoY to hit 93.8 million yuan, accounting for roughly 25% of its total operating expenses during the period.