Tricolor adds AI to improve risk scoring for underserved Hispanic community

Source: Tricolor

Tricolor, the nation’s largest used vehicle retailer focusing on the sale and financing of vehicles to the Hispanic consumer, today announced an exclusive agreement with Phenx Machine Learning Technologies, Inc.,to expand an artificial intelligence (AI)-powered financial services platform serving Hispanic consumers.

In early testing, Tricolor’s newly AI-enabled algorithm demonstrated enhanced underwriting accuracy and the ability to rapidly scale to score massive amounts of data records.

“Over the past decade, we have continued to refine our scoring methodology to accurately assess risk and responsibly extend over $900 million in affordable loans to subprime Hispanic customers,” said Daniel Chu, CEO of Ganas Holdings, the parent company of Tricolor Auto Group. “The addition of Phenx’s advanced AI into our algorithms immediately improved this accuracy and showed an ability to process massive amounts of additional data. We are excited to expand this work through this exclusive agreement and uncover even more applications for our platform.”

Cincinnati-based Phenx Machine Learning Technologies develops state-of-art deep learning algorithms that automatically identify the core patterns hidden in data to help make smart business decisions. Tricolor has applied this technology to its credit scoring methodology which segments customers into six credit grades. In early testing, the new AI-enabled algorithms were able to identify the quality loans in each segment for cleaner segmentation of loan and credit types. Based on these promising results, the two companies have entered into an exclusive agreement for financial services serving the Hispanic consumer.

“Because of its proprietary and market leading analytics to underwrite credit invisible consumers and its commitment to invest in technology, Tricolor is uniquely positioned to capitalize on AI solutions,” commented Dr. Saurabh Sarkar, founder and CEO of Phenx, who previously spent seven years as a Vice President at JPMorgan Chase developing advanced models to support a $50 billion auto loan portfolio. “We are enthusiastic that this partnership will not only result in significantly enhanced underwriting processes, but also accelerate Tricolor’s overall vision to become the premier financial services platform serving this niche consumer.”

“There are 45 million people in the United States whose lack of a credit score translates into limited options for financing major purchases such as a motor vehicle,” continued Chu. “We are excited to be the exclusive Hispanic financial services partner for Phenx, and eager to apply their leading AI technology in service to our customers.”

Since its founding in 2007, Tricolor empowers its customers by providing access to affordable financing on high quality, certified vehicles in order to enhance the quality of their lives and ultimately help them to build a better future. On a combined basis, Tricolor and Ganas have served nearly 50,000 customers and disbursed nearly $900 million in affordable auto loans by using its proprietary model to segment risk.

Tricolor issued its first securitization in July 2013.
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