Thought Leaders in Financial Technology: Ed Wallen, CEO of C&R (Part 3)

Sramana Mitra: What dataset are you working with? In this example that you gave where somebody lost a job, where is that signal coming from that person who has lost a job? Are you expecting the person to report that they’ve lost a job? Where is that signal coming from?

Ed Wallen: It depends on the geography that we’re operating in. In the US, UK, and most of western Europe, we have different data providers that trigger or signal those cases to us that we’re able to ingest in real-time as that happens and then react to it.

We can switch our treatment plan based on these triggers that come into the system. In other geographies, there’s no central repository that’s collecting that information. It’s more of just outreach and discovery.

Sramana Mitra: The client needs to report basically.

Ed Wallen: The end customer.

Sramana Mitra: All these other signals like the cost of rent, gas, and electricity which takes precedence over a credit card payment, are you drawing those based on zip codes and averaged data?

Ed Wallen: We work off of actuals. This is geography-specific. The UK is leading the charge on this. They’re the most advanced when it comes to positive outcomes for their consumers. They regulate the entire income and affordability process. There are standard financial statements that we can tap into when the consumer needs to get assistance. Then we are reacting to that and do different things around managing overdrafts, loan workouts, or creating affordable and sustainable payment plans.

Sramana Mitra: In that process, the end user is interacting with your system and giving you input. They’re doing a budgeting and planning cycle with your AI to build the data on which you’re modeling things.

Ed Wallen: That’s correct.

Sramana Mitra: Very interesting. When you look at your universe from our vantage point, what are some open problems that are not being addressed today that you think are important problems that new entrepreneurs could build companies around?

Ed Wallen: There are a number of open problems. The one that pops to mind is the panacea of a bank-in-a-box concept, basically providing the full end-to-end platform for a digital bank to run on. That’s like a boil the ocean scenario. It’s going to take a lot of capital.

More realistic scenarios are digging into the business domain in very niche areas. For example, retail shrinkage. You’ve got goods in a warehouse that you need to get to a distributor that needs to show up on the retail floor. That has to be kept in line with the books. Oftentimes, what’s in the store doesn’t align with what’s on the books. There’s a whole host of problems that could be addressed through the use of data streaming and analytics for cases like that.

For new entrepreneurs, the best advice I could give, in terms of having a successful startup that has a fast time to ROI, would be to understand the business domain really well and then tackle a problem where the rubber meets the road. There are many data streaming problems out there and there’s a lot of investment going into data streaming platform development and analytics generally. Being able to take that and make the rubber meet the road is where the value is.

Sramana Mitra: I couldn’t agree more. What you need to make the rubber meet the road is domain knowledge. Very fine-grained domain knowledge. If you have that, you can come up with problems to solve. There are a lot of horizontal AI platforms. All these exist. They will continue to get great penetration into the industry but it’s that fine-grained domain knowledge around which great companies are built. That’s the missing link.

Thank you for your time.

This segment is part 3 in the series : Thought Leaders in Financial Technology: Ed Wallen, CEO of C&R
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