The logic behind many fintech companies’ automated decisions — decisions that determine whether a customer is approved for a line of credit, for example — is hard-coded in the backend of their app. This means that if, say, the head of credit wants to make a change to lending standards, he has to raise a ticket with the IT department.
To make altering this type of automated logic a more self-serving process, Maximilian Eber and Maik Taro Wehmeyer founded this tactile in 2020. The two met while studying at Harvard and were part of the leadership team at QuantCo, a company that builds AI-powered applications for enterprise customers. While there, they found that many of the automated decisions were poorly designed, never properly tested and required a lot of engineering capabilities – which ultimately led to guesswork.
“Based on our experience, we decided to create a platform — Taktile — to enable experts, such as a Chief Risk Officer, to design, evaluate and deploy decision flows themselves without the need for developers,” Wehmeyer said in an email interview. “Using Taktile, fintechs can adjust their risk selection in a data-driven way, ensuring that they only take on risks that are commensurate with their strategy.”
When asked about the size of Taktile’s customer base and financials, Wehmeyer declined to comment, citing competitive reasons. But investors seem to see growth potential. Taktile today closed a $20M Series A round led jointly by Index Ventures and Tiger Global, bringing the startup’s total to $24.7M. Tiger’s post is particularly noteworthy given that the venture capital firm has recently scaled back its investment, targeting $6 billion for her next fund – half the size of her previous investment vehicle.
“The round was pre-empted by Tiger Global and Index Ventures as they saw strong indications of product-to-market fit and thought the time was right to start scaling the business,” said Wehmeyer. “This round will help us accelerate our continued expansion in the US, where we have seen rapid growth, increasing our customer base by 4 times since the end of last year.”
For clients, Taktile offers a no-code interface that allows non-technical staff to build, modify, and evaluate decision flows. Wehmeyer gave an example: Suppose a bank wanted to adjust its lending criteria by moving the minimum age to apply for an account from 25 to 21. Taktile would allow the bank’s head of credit to actually test the change and analyze its impact before. implement it.
Users can also leverage Taktile to pilot out-of-the-box data integrations, monitor the performance of predictive models in their decision streams, Wehmeyer says, and run A/B tests to evaluate those streams. He claims that Branch, Moss, Rhino, Novo, and Vivid Money are among the fintech companies that use the platform to power 280,000 decisions per day.
“Since the beginning, our technology has been used by advanced lenders who host machine learning models on our platform, which process thousands of variables from alternative data sources to assess the creditworthiness of potential borrowers,” added Wehmeyer.
It’s a lot of sensitive data that Taktile handles. To allay the concerns of privacy advocates, customers and regulators, Wehmeyer says Taktile has built technology that enables its customers to host decision streams in their country of choice and process the data locally — a requirement for many regulatory agencies.
This likely won’t solve the different but related problem of computational transparency. as a piece in New York times As detailed recently, some lenders are increasingly relying on out-of-the-box data sources to assess creditworthiness, offering opportunities to consumers historically inhibited from certain financial products but at the same time exaggerating the risk of persistent biases or making inaccurate predictions.
Taktile places the onus on its fintech clients to communicate the types of data and models they host and publish across the platform.
“The decision-making needs in the financial industry are evolving rapidly, particularly when it comes to integrating decisions with machine learning and applying data-driven optimization to decision streams,” said Wehmeyer. “These needs aren’t really being met by the legacy players in the market, so we’re mostly competing with in-house solutions built by cutting-edge teams.”
Wehmeyer also sees Noble, a platform that provides a rules-based engine for editing and launching credit forms, as a Competition. But he maintains that Taktile, which has passed through Y Combinator, has a “healthy” cost structure and plenty of capital to hire talent.
Prior to the downturn in technology, fintech companies were primarily driven by customer growth at any cost. Now, however, investors expect a clear path to profitability, which makes complex decision-making about risk a challenging requirement,” Wehmeyer said. “Building a complex decision-making system takes years of work and costs millions of dollars, so instead of going down that path, customers are turning to platforms such as Taktile to quickly adapt to the volatile new market dynamics.”
Taktile, which employs a team of 45 people, has offices in New York, London and Berlin. Wehmeyer says he expects the staff to grow to 70 people by the end of 2023.