The logic behind automated decisions that determine whether a customer is approved for a credit line is hard-coded into their app's back-end. If a head of credit wants to make a change to the lending criteria, they need to get in touch with the IT department.
Taktile was founded in 2020 to change this type of automated logic into a more self-service process. The two met while studying at Harvard and were both a part of the leadership team atQuant Co.
Wehmeyer said that Taktile was built to empower experts, such as a head of risk, to design, evaluate and deploy decision flows on their own. Taktile can be used to adjust risk selection in a data-driven way.
Wehmeyer wouldn't comment on the size of Taktile's customer base or financials. Growth potential seems to be seen by investors. Taktile closed a $20 million Series A round co-led by Index Venture and Tiger Global. The VC firm recently scaled back investments, targeting $6 billion for its next fund, which is half the size of its previous investment vehicle.
There were strong indications of product-market fit and the time was right to start scaling the business. Since the end of last year, we have seen rapid growth in the U.S., and this round will help us accelerate our expansion.
The image is called Taktile.
Nontechnical employees can use Taktile's no-code interface to build and evaluate decision flows. The minimum age to apply for an account at the bank would be moved from 25 to 21. Taktile would allow the head of credit at the bank to back-test the change before implementing it.
Users can use Taktile to experiment with off-the-shelf data integrations and perform A/B tests to evaluate their decisions. The platform is being used to power 280,000 decisions every day.
Wehmeyer said that their technology has been used by advanced lenders that host machine learning models on their platform.
Taktile deals with a lot of sensitive data. In order to allay the fears of privacy advocates, customers and regulators, Taktile built technology that enables its clients to host decision flows in their country of choice and process data locally.
The problem of algorithmic transparency won't likely be solved by that. According to a piece in The New York Times, some lenders are increasingly using outside-the-box data sources to evaluate creditworthiness, presenting opportunities to consumers historically barred from certain financial products but at the same time making inaccurate predictions.
The onus is on Taktile's customers to communicate the types of data and models they're hosting and deploy via the platform.
Wehmeyer said that the decisioning needs of the financial industry are rapidly evolving. Legacy players in the market don't meet these needs, so we compete with in-house solutions.
Noble, a platform that provides a rules based engine to edit and launch credit models, is seen as a rival by Wehmeyer. He claims that Taktile has a healthy cost structure and plenty of capital to hire talent.
Customer growth was the main driver of fintechs before the tech bubble burst. Wehmeyer said that investors expect a clear path towards profitability which makes sophisticated risk decisioning difficult. Customers are turning to platforms like Taktile to quickly adapt to this new, volatile market dynamic because building a complex decisioning system takes years of work and costs millions of dollars.
Taktile has offices in New York, London and Berlin. He expects the number of people to grow by the end of the year.
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