Q: First, how is Kabbage different from traditional lenders?
Kathryn: The biggest difference is that we were established in the digital age, so data is at our core. We fill a niche in that we focus on small companies who need modest loans to further their businesses. We also recently launched our consumer program, Karrot, which lends to start-ups and individuals who may lack the necessary credit history for traditional loans.
Q: Why did you decide to use FICO® Origination Manager?
Kathryn: We originally licensed decisioning technology from a third party, but found it hard to work with. We then decided to build a solution in-house, but that became difficult to manage. For us, Origination Manager has been great because it helps us manage multiple concurrent models in a way that we couldn’t before. And we use it for more than originations—we have account management, payment, collections and servicing models, all of which we can manage in one place.
Q: What sort of business growth have you seen?
Kathryn: We have increased our revenue by 300 percent in the last 12 months, and we expect that growth rate to continue in the future. Honestly, we would not have been able to achieve that growth without the automation that we get from FICO and some of our other technology providers.
Q: How does your success translate into success for your customers?
Kathryn: At Kabbage, we talk about the “virtuous cycle,” which is all about helping our customers succeed. We fund our customers so they can buy more inventory or open new lines of business—when they do well, we do well. We find that, on average, our customers are able to boost their revenue by 72 percent after working with us. And most of these businesses are small and wouldn’t have access to the quick infusions of capital they need without Kabbage and the technology that we use to automate our processes.
Q: What sort of support have you received from FICO?
Kathryn: The FICO team has been fantastic about working with us to understand and address our unique needs. We’re continually learning how we can get even more out of Origination Manager. As we scale the number of models that we develop and move into new markets, it’s especially important for us to have a strong partner like FICO to help us accomplish our goals.
Do you want to learn more about what Kabbage and FICO are doing to improve small business lending? Here is a great video interview with Kathryn Petralia on the subject.