By RYAN MURPHY — Tuesday morning, local start-up Rebirth Financial unveiled its new JAS Rating System in front of a crowd of over 1,000 at the FinovateFall conference in New York City. The conference presents the latest in financial innovation from around the world to an audience of financial institutions and venture capital firms.
CEO Chonchol Gupta overcame food poisoning to deliver the seven-minute presentation. “Do not eat the eggs at the Hawaiian barbecue on Fulton Street,” said Gupta.
Rebirth Financial operates a platform where small businesses receive loans from individual and institutional investors. The JAS Ratings System gives investors a method to evaluate credit risk on the loans.
From one year of basic financial data, their new ratings system provides a measure of the financial health for a potential borrower on a 1-100 scale. The system uses a true neural network built on IBM SPSS that performs hundreds algorithmic calculations in less than a fraction of a second to compare the borrower to industry averages.
“Our innovative rating system can do for small businesses what S&P and Moody’s do for publically-traded companies,” said Gupta. “We can do it with the same financial information gathered on a small business loan application with an 86% accuracy.”
In addition to using the system on the platform, Rebirth Financial plans to offer the rating systems to community banks and credit unions as a stand-alone product.
“If a community bank receives just 5 loans per day, using the JAS Rating System that bank could save $130,000 and 2,600 hours of their commercial bankers’ time. The JAS Rating System makes lending more accurate, less labor-intensive, and more profitable,” said Gupta.
The company is optimistic that the Finovate presentation will produce tangible benefits. “Our presentation has already yielded significant interest and demand from industry professionals in the United States and abroad. We are extremely excited about the possibilities.”
The JAS Rating System, which is pronounced “jazz”, is named after the three Tulane MBA students that developed the system, Jordi Figueras, Ajaypal Singh and Shiv Thukral.