From default to fraud: Understanding 4KST's AI scores

Do you know how 4KST's AI Scores work? Read on to find out how you can benefit from accurate predictions.

Scores have a much older origin than machine learning and Artificial Intelligence. They are a statistical value calculated by a mathematical function. These values, in the form of scores from 0 to 1000, indicate the probability of something happening or not, according to predefined parameters.

But it is Artificial Intelligence that allows us to work with a much larger amount of data for these predictions, and through Machine Learning and Predictive Models, the machine can start making predictions autonomously.

Scores can be assigned to customers, financial transactions and even the closing of contracts. It all depends on the guidelines given to the machine in the Predictive Model and what you want to find out (parameter).

What are the types of 4KST AI scores?

At 4KST we create customized Predictive Models according to our clients' needs. And for each of them, a different type of Score is generated. Below you can see some of our solutions and which sectors they apply to.

Credit Score 4KST

Granting credit to customers you don't know increases the risk of default. Many companies go bankrupt because they have to bear the costs of buyers who don't honor their debts.

With 4KST's Customized Credit Score, you evaluate your customers according to the operation and performance data of your own business. Through a secure interface, the institution will pass on its credit harvests (CPFs, date of operation and performance) and we will return the Score for each of the operations. With a Customized Credit Score, we guarantee more accurate results and lower costs compared to traditional credit bureau models. Ideal for small and medium-sized financial institutions, credit fintechs, insurance companies and retailers who need to assess customers' credit with their company. 

4KST Anti-Fraud Score

This Artificial Intelligence tool is able to identify suspicious financial transactions and thus prevent potential fraud in the online and face-to-face environment. 

And 4KST Antifraud has a difference. It is the only one capable of updating itself in real time, keeping up with the dynamics with which fraudsters change tactics. 

Data such as the person's name, social security number, credit card number, financial history and other public information, analyzed in accordance with the General Personal Data Protection Act (LGPD), helps to profile the perpetrator and identify whether the operation could be a threat to your company.

With the fraud score in hand, it is easier for your company to assess whether to approve or reject an operation or take other measures to prevent a potential scam.

4KST Vehicle Liquidity Score

4KST's Vehicle Liquidity Score is the first in Brazil and, as the name implies, it helps financial institutions and companies that finance, buy, sell or auction vehicles.

Our Artificial Intelligence algorithm analyzes data from millions of vehicle purchase and sale transactions in the country and, using a predictive model, shows the probability of selling any vehicle with a chassis within 180 days, whether it's a car, motorcycle, light or heavy truck, among others.

With this score in hand, financial institutions and companies can better qualify loan guarantees, offer appropriate rates and measure assets based on the correct speed of return on capital.

To build this predictive model, we used data from Plug, the B3 (Brazilian Stock Exchange) data hub. 

Behavior Score

As its name suggests, this score is calculated based on the history of consumer behavior. How is he perceived by the market? Do they have assets? Any debts? Late payments? 

Artificial Intelligence answers these questions and draws up a Behavior Score based on public information (always respecting the General Law on the Protection of Personal Data) based on the consumer's behavior in the market in recent years.

Typically, industries and distributors in any sector work with recurring orders and B2B (business to business) customers. Sometimes, because the relationship is long-standing, these companies have a wealth of data and a rich history of their customers.

The Artificial Intelligence algorithm analyzes this set of data and assigns a score based on the customer's ability to pay. In this way, the company will know which customers are good payers and which are bad payers, and thus decide whether or not to close the deal.

In which sectors do AI scores apply

We have already seen that the Artificial Intelligence score can be used, for example, in the market for buying and selling vehicles and also in industry and distribution in any sector: from food to cosmetics, medicines and machinery. But the applications are actually much more numerous.

Education

Schools and educational institutions of all sizes and levels can use Artificial Intelligence to offer personalized attention to each student.

By analyzing student history, our predictive models are able to predict student dropout and default rates with a high degree of accuracy, 60 to 90 days in advance.

Based on this information, it's easy to understand that a school can act directly on student retention by, for example, offering new financial conditions or reduced tuition payment deadlines.

Finance

A bank or financial institution can benefit from this technology when granting financing and loans, since our scores objectively and accurately measure the debtor's ability to honor the debt, eliminating potential bias and human error. 

How are 4KST's AI scores built?

The scores are grades given to individuals and companies by predictive models based on Machine Learning (ML) technology, also known as machine learning. 

ML is a branch of AI that creates systems that can modify their own behavior autonomously, based on their own experience. In other words, these robots learn and improve from their own experience.

To build these predictive models here at 4KST we use data from the past to "predict the future". Basically, a large amount of data (have you heard of big data?) is fed into the algorithm, which processes it and, in the end, presents a result. This result is the score.

Are you interested in finding out how your company can benefit from Artificial Intelligence when it comes to closing a deal? Get in touch and find out more about our solutions! Click here