Fintech Entrepreneur and "Misfit": Aneesh Varma
Fintech Entrepreneur and "Misfit": Aneesh Varma
Social revolutionaries can appear in the most unlikely of places, and none more so than in the seemingly prosaic financial industry. XXY’s Features Editor Vanessa Moore caught up with Aneesh Varma, founder of fintech startup Aire.io, to chat migration, machine learning and shaking up the credit industry through social delinquency.
Vanessa Moore: Could you start by telling me how you first got the idea for Aire?
Aneesh Varma: Every company lives in the founder’s head long before it does in reality. For me, it went through a very personal problem I faced when I first moved to the UK. I guess I’m in that group of people you call a migrant.That word has both negative and positive connotations these days; I take it very positively. But I moved here about 8-9 years ago from New York. And as every foreigner coming in will tell you, the banking system and the financial system just doesn’t know what to do with you. So I was getting the usual, ‘Sorry, we can’t really give you a bank account or a credit card’. Things that you’re pretty used to getting living in New York.
VM: Was that purely just because you didn’t have a credit history here?
AV: It’s because you’re new to the system. ‘Computer says no!’ is usually because ‘Computer says, I don’t know’, and nobody wants to take that a step further. They’re like, ‘Computer says no, you’re off the chart, buddy’. And I just didn’t think that was the right answer. I’ve always been a bit of an activist customer. I’m sure there are airlines around the world who have gotten very harsh letters from me, emails…
VM: So you just took that up a step further?
AV: I was like, ‘This is ridiculous!’ So I went ballistic on them and took that up to the CEOs. ‘This is my situation, look at my data. I have all this stuff from my US existence, my credit score, my bank accounts…’. I just bombarded them with data to make sure I could show that I’d be a great customer for them to take on, and this was just a flaw in the system.
This became sort of my personal fight. Sometimes you need a personal project that’s a hobby on the side. This was it. I started by writing letters to MPs in Westminster. I wrote letters in the US to Senators saying, ‘If you’re in this category, there’s this problem ticking the usual boxes.’ If you’re self-employed or a freelancer, or a contractor. All these stories started coming up for me, talking to a lot of people and reading blogs and forums. It was frustrating to see these great people being told by the system that they didn’t fit the box.
VM: I guess they haven’t even got any debt to begin with and are starting at zero. So these people could actually be even better candidates than somebody who maybe has a history but is already in debt?
AV: Exactly. And I just found it so ridiculous that the system did this. Part of it was because back in the ’50s and ’60s the system was built around a very simple process. Everybody kind of fit in the same box. Everybody lived in the same place. You had the same job for 20 years, you grew up within a 40-mile radius of where you were born. If you’re an engineer you do an engineering job, if you’re an accountant you do accounting jobs. This cross-pollination of sectors and people and moving for professional reasons and personal reasons, all that chaos – that is the chaos of almost being the new world reality – didn’t exist.
And 20-25% of the population (and growing) is fitting into these brackets where the system is saying, ‘I don’t know what to do with you, so I’m either going to penalise you (which is the worst thing), or I’m just going to block you from access.’ I find it ridiculous.
VM: And a lot of people these days are self-employed or freelancers…
AV: It is what it is. There’s nothing wrong with it. It’s a great form of working if you have a special skill set. It allows you to be mobile and it actually allows you to have more stability because you’re not tied to one employer. But the traditional market doesn’t like that.
If I look out onto the horizon 10-15 years from now, the majority of us will have some type of self-employment category, even if we have a ‘normal’ job that is supplemented with something else we do, and that collectively becomes our source of employment. But it’s the world we live in and I think a lot of us will have to adapt to that reality. But the bigger point is the systems around us have to adapt to that.
Mid-2013, I spent a few weeks really looking at how I could build this company that could solve this problem. Because it felt like a big problem. But it also felt like something that required a system to shift internally. Like you need to go back to the bedrock of financial ecosystems and just re-jig the tiles, because that’s how bold the idea was.
VM: So that leads me quite nicely into asking about the technology behind it. How did you decide to use the machine learning technology that you do?
AV: So the thesis I had was these individuals, of whatever category – I call them ‘misfits’ in a positive sense – and I’m part of that group. Every day I meet so many, and we all share a common bond. I found the only way to really understand these people is to understand the context of who they are. Because the traditional automated approach was too driven by rules and structure. Nothing wrong with it, but in the ’50s and ’60s that’s what the technology allowed you to do. ‘If so, then do this’. Very linear.
But I found the human brain is really powerful. It’s able to learn context and figure out the situation and circumstances of an individual: they’re self-employed but they’re a freelancer, they have this great skill set. If you add all those circles up together you get to a really great point. How do you bring the power of human intelligence into decision-making at scale? And I think that’s the curve we’ve been looking at as a company to explore. How do you bring together the power that human intelligence does, adding context and understanding smaller nuances, but in an algorithmic, technology-scalable manner? So in the long run, I am trying to replicate what the human brain can do, at least in the narrow context of credit.
A lot of the tech we use ‘under the hood’ is various forms of machine intelligence trying to figure out how to take a smarter and more contextual look at the consumer that’s in front of you. There are various buzzwords around and various forms of AI that all get looped in. And actually, this is the past experience of some members of the team. We do want to leverage that tech, and that’s what allows us to build this algorithmic approach.
VM: I was thinking about your company name, Aire, and wondering where it came from? How did you decide on it?
AV: I wanted a name that felt very non-financial, that wouldn’t scare people. Like ‘Credit scoring systems’ would scare people away. And I wanted it to be very natural. I was looking at various short, small words, and Air was also an acronym I was using for this project, a rough approximation of what it is, and then we added an ‘e’. We like it now, and it strangely translates in many languages to something fresh and clean and is almost as essential to your life – air – as what we think credit is to your financial life.
All of us are deeply aligned with what we’re trying to solve. This is what we care about and for some of us, this is deeply personal. There are a lot of small nuances to it, so a lot of my job is to make sure that this is within the budget and means that we have.
VM: Who are the people you specifically had in mind when you were trying to work things out?
AV: I guess it still reflects back to your personal incidents. What you know really well resonates if it’s part of your thesis. The few of brackets I fell into were obviously narrowed down to ‘migrant’. I was new to the country. A person who’s moving around, a global nomad, I like to say. I’d been a founder of a company, so in most cases, you’re classified as a self-employed person. I found that’s a growing population that’s constantly being told no. So those two areas consistently came up for me.
And as we’ve been spending more and more time researching, we’ve found there are a couple of other categories. Some of them you really feel sad for. We see people who are off serving their country in the armed forces perhaps. When they come back 5-6 years later, their history has evaporated. It’s shocking. Another category is recent divorcees. That’s interesting because everything was in the name of your spouse. Twenty years later, sadly, this person’s out on the market by themselves and they’ve been going through a tough time solving the divorce, and now the financial system’s messing them around.
VM: That’s really socially shocking, to hear those types of things are happening. Keeping to the social activism side of things, the meaning of social delinquent for this edition of XXY is slightly different to the norm. We see it as creatives who are breaking social boundaries or using their craft as a platform for what they believe in. How do you feel about being labelled as one?
AV: It’s an interesting word. Like I said, we use the label ‘misfits’ and that can have positive and negative connotations. It’s a word that creates conversation. I think because I see this as a new world reality, I see a lot more of us trying to fight for what we need. I started this as an activist customer who just wanted to get this stuff solved for me. And then I realised there were more people like me. The more people I met, the more inspired I was.
And I believe that if you’re going to build a revolution, what you need to do isn’t to convince everybody. What you need to start with is a highly motivated group whose members really get it and can organise themselves really well. Because their power and their collaboration leads to the movement and that creates the spark. That’s really much more important to me. It does add a reason for you to come to work every day.
Words and direction by Vanessa Moore,
Photographs taken by Ieva Lasmane
Location and looks: Aire’s Shoreditch offices and Aneesh Varma’s own