On Tuesday, in its first such agreement to be made public, the British financial technology firm OakNorth signed a five-year deal to provide its credit analysis and monitoring platform to Dutch lender NIBC Bank NV.
In a February funding round, being Britain’s most valuable financial technology company, OakNorth has raised worth $440 million from investors, including Japan’s SoftBank Group and the firm was valued at $2.8 billion.
As the firm works to monetize its proprietary software and justify the ‘unicorn’ status implied by its multi-billion-dollar valuation, OakNorth had a deal with NIBC bank. It is the first enterprise-wide agreement to be announced between OakNorth and a bank.
Helping the banks make better decisions on small business loans, NIBC is seen to use OakNorth’s technology for better result production.
In a news report, OakNorth Chief Executive Rishi Khosla said that more such deals will be announced shortly but declined to give financial details of the NIBC deal.
He stated, “We are engaged with over 10 banks from today, and behind that there are at least another 10 which we are actively working with.”
Since the February funding round, OakNorth has grown rapidly. Also, to improve decision making and to cut costs, decision making is done by artificial intelligence and business analytics. Investing heavily in technology is seized by banks as a growing trend.
Khosla said OakNorth hires software developers, credit experts, and product designers. It is because the financial technology firm’s staffing levels have nearly doubled from just below 300 in February to 520 today.
Expansion on Asian Markets
In recent weeks, as the firm targets expansion in the United States, continental Europe, and two to three Asian markets, OakNorth has made a number of significant hires from major technology companies.
OakNorth is operating two main businesses. The first is a bank in Britain focused on loans to small and medium-sized businesses. Second is its technology platform, which it says uses data analytics and AI to help lenders make decisions.
The financial performance of its peers and sentiment about the brand from online reviews are operated by the software to know some data about a prospective borrower and to help inform lending decisions.
A level of detailed credit analysis normally reserved for loans above 25 million pounds worth $31.60 million is only allowed by such software as OakNorth.
In March last year, NIBC was listed in Amsterdam, Netherlands, Germany, Britain, and Belgium. It is known as a mortgage broker and lender to small and medium-sized corporate borrowers.