An average bank needs 15 minutes to analyze your transaction files and decide whether it is safe to give you a loan. During these 15 minutes, a bank employee manually scans your record, looking for risk-critical transactions such as gambling, short-term loans or credit card overdue payments. Nordigen is a Latvian startup that automates this process, reducing the time required to 5 seconds per applicant and actually reducing the number of errors.

Nordigen was founded by Roland Mesters, previously a founder of a small IT company, and Robert Bernans, who gained his experience at a small alternative lending institution. “We started working together because of the Garage48 hackathon, where Roberts had a crazy idea to use the power of data to disrupt the airline industry,” said Mesters. “From airlines, we moved to banks. After spending more than a year on the idea, we found our first angel investor and contacts in the lending industry.”

Their main product is an API that banks can integrate into their existing infrastructure. The integration takes just 30 minutes and allows the banks to process transaction files in PDF, CSV, XLS, XML and JSON formats. Instead of connecting the API, the client (bank or an alternative lending company) can use a drag-and-drop interface instead.

How does the Nordigen solution work? First, you input the credit applicant’s transaction files into the program. The categorization engine divides all transactions into 200 categories. It does not base on keywords or MCC codes only, but rather uses machine learning algorithms and artificial intelligence. These techniques allow the program to reach 95% categorization rate on all risk-critical transactions. This success rate outperforms both keyword-matching software and manual sorting through the files.

The result, displayed after only 5 seconds of processing, is a list of all transactions assigned to their categories. Additionally, Nordigen creates a separate list of “red flags” –applicant’s behavior that may prevent him from getting a loan. For example, if the applicant has taken short-term loans, they will be displayed as risk factors.

Nordigen was launched in 2015 and is now a fully working solution that has already been applied by 25 clients (both banks and alternative lenders). The company has measured that their solution allows the banks to approve 15% more loan applicants. The Nordigen team has graduated the Nordea Bank Accelerator and won the Rietumu Fintech Challenge.

The platform is available in Baltics, Poland, Spain, and Finland. In 2017, Nordigen plans to enter the United Kingdom as their next foreign market.