For the 5th installment of Fintech Stories, we have reached out to Christina Trauboth, one of the founders of GoKredit.dk, which has started to operate in the Danish digital lending space several years ago. Denmark has seen a lot of growth in the past couple of years in terms of fintech, an area in which they were lagging at one point in comparison with their Scandinavian counterparts. Among other initiatives, the local association of Copenhagen Fintech plays an important role in promoting Danish fintech throughout the world.
“Banks and fintech startups can benefit from each other’s strengths”
What was the most difficult obstacle you had to overcome while building GoKredit?
Data mass is critical. When setting up a loan business in Denmark you need to prepare to spend approximately DKK 15M (GBP 1,5M) in initial credit losses and think of it as an investment in data and knowledge to build upon. We have developed our own automated scoring algorithm, risk management and lending system, using the collected data combined with partner data integrations and digital sign-off on loan documents, to secure that the credit loss we take is minimal and still provide customers with a fast and simple loan experience.
What’s your take on the relationship that banks and fintechs should have?
Banks and fintech companies can benefit from each other’s strengths. Banks have several years of operating experience, customer data and access to large capital. Fintechs have an innovative approach and new tech ideas and processes that benefits the customers. If I owned a bank I would either buy an existing fintech company for a close partnership or set-up an in-house fintech department with the freedom to operate as a start-up and incorporate the fintech way of things into corporate banking.
You’re currently in the process of raising a 0.5 mln GBP in capital to fund a new product. Tell us a little bit about it.
The future of GoKredit is to scale-up our business and continue high level and fast fintech software development with the launch of a new credit product in spring 2018. This will be built on top of the existing loan handling platform and scoring model, which is also prepared to scale to a range of new consumer credit offerings. The new credit product is similar to bank credits but with limitations on withdrawals, higher fees & interest and a short automated approval cycle.
We have secured the working capital to lend out from a Danish partner and are now looking to raise funds to be invested in marketing of the new credit product and adding new team members.
What’s the unfair advantage the GoKredit has compared to other products operating in the same market?
We benefit from being driven by the founders and owners. Not being a part of a larger corporation gives us larger flexibility and a very short decision and execution time for testing new ideas.