Digital transformation is having a significant impact on the financial sector. Data science in finance is the most applied technological innovation, which allows fintech applications to automate ever more complex processes and decision-making with the highest level of accuracy.

Softengi developed on the request of a finance service company, which offers data-focused solutions for the lending industry, tailored-made machine learning algorithms, based on data science, in finance applications of the company. The designed ML algorithms allow the company’s application to recognize various transactions and analyze their content, generating only relevant information. Specifically, Softengi enabled the software to analyze a huge number of transactional documents provided for obtaining a loan. Using data science in finance landscape and its algorithms allowed the company to automate the processing of transaction documents, and hence improve workflow productivity.

Data Science in Finance
Data Science in Finance

The Client Company 

The Softengi’s client is a service provider of lending solutions that allow to make more accurate and timely loan decisions, automating the whole lender information processing. Utilizing data science in finance, machine learning algorithms, and both historical and real-time data, the company’s software is able to verify borrower identities, their account number as well as balance in real-time. In essence, the service provider gathers large amounts of financial data from various institutions as well as organizations around the world and analyzes it with Machine Learning techniques, classifying gained information and structuring it in a user-friendly way.

The Problem of the Client Company

At its core, lending and credit scoring is a Big Data problem. The  conventional credit scoring is neither efficient nor error-prone, as it rejects applications from debtors able to repay their loans. To assess the creditworthiness of the individual or business that took out the loan, the finance companies have to manage a large amount of various forms of data available and identify what is the percentage of probability that this person will pay the loan. The more data a company has about an individual borrower (and how similar individuals have paid back debts in the past), the better it can assess their creditworthiness.

The client company approached us to help it efficiently process financial data and classify  transactions in various categories with high accuracy. The solution has to be able to automatically identify transactions by their source or by comments that the customer includes to describe the transaction and classify in appropriate categories.

The Solution 

For this task, Softengi harnessed machine learning, data analytics, and data science in finance matters. Softengi developed a system that classifies financial transactions in various categories among which are obligations, purchases, household, leisure, domestic, health. Embedding data science in finance, the software enables the company to automatically analyze available transaction information derived from sales receipts, packing slips, and purchase confirmations. For instance, if a transaction documentation contained the name “Shell”, then machine learning technology recognized a payment for car refueling and marked the transaction as belonging to the appropriate section, namely domestic. 

Technologies used: Azure Machine Learning, .NET, Python.

Data Science in Finance
Data Science in Finance

The Result

Today, the client company can better manage Big Data, effectively processing and categorizing it. Applying data science in finance context allowed Softengi to design ML-based algorithms that enabled the client company to automatically classify a large amount of various transactions, thereby enhancing its lending scoring and banking services.

Learn more about using AI and Data Science in Finance.

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