Propensity Model for Predicting Business Financial Needs
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Solution Overview
Problem
Growing businesses often fail to anticipate future financial needs, leading to disadvantageous loan applications and potential stunting of growth due to the burdensome process of obtaining low-interest rate loans.
Innovation Solution
A method and system for determining a future financial requirement of a business entity by creating a propensity model based on its data, scoring the entity, and transmitting messages for targeted financial offers, ensuring timely and appropriate financing.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Loss of time
If businesses wait until they actually need financing to apply for loans, then they can apply based on immediate needs, but they face higher interest rates and a burdensome protracted application process
Solution Approach 1:
The system performs preliminary action by using propensity models to predict future financial requirements before businesses actually need financing. This allows early identification of businesses that will need loans, enabling pre-qualification and early application processes that avoid the burdensome experience of last-minute loan seeking.
2Reliability
If businesses apply for low interest rate loans early, then they can secure better financing terms, but they face a burdensome and protracted application process
Solution Approach 1:
The system enables self-service by automatically gathering business data from existing platforms, applying propensity models to predict financial needs, and pre-qualifying businesses without requiring manual application processes. Businesses are automatically evaluated and matched with financing options based on their predicted needs and profile characteristics.
3Productivity
If businesses grow rapidly, then they increase market opportunity and revenue potential, but they are more likely to experience future financial needs that they fail to anticipate
Solution Approach 1:
The system implements feedback by continuously monitoring business data from platforms, applying propensity models to predict future financial requirements, and providing early warnings to businesses about upcoming financing needs. This feedback loop allows growing businesses to anticipate and prepare for financial requirements that would otherwise be unexpected.
Data Source
AI summary
A method for determining a future financial requirement of a business entity. The method includes obtaining a propensity model. The propensity model models how data of the business entity relates to a future financial requirement of the business entity. Also, the method includes gathering the data of the business entity. The data is created based on a platform utilized by the business entity, and the data of the business entity matches at least a subset of the propensity model. In addition, the method includes scoring the business entity by applying the propensity model to the data of the business entity. The method also includes generating, based on the score of the business entity, a classification of the future financial requirement of the business entity. Further, the method includes transmitting a message to the business entity based on the classification of the future financial requirement of the business entity.