Unnamed Russian Banks Are Using AlterGeo’s Location Data For Credit Ratings

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To some extent, AlterGeo bills itself as the ‘Foursquare of Russia’. You can check-in to a location via their apps, get discounts, the usual sort of thing. But on the back end of the consumer facing apps it has a hybrid positioning technology which is a B2B product. It is far more sophisticated than Foursquare. Founded in 2008, AlterGeo employs WiFi, WiMAX, GSM, LTE, IP addresses and the network environment to determine a user’s location. AlterGeo then licenses its location technology to third parties to build up a ‘picture’ of the user.

AlterGeo’s hybrid positioning system claims to avoid weak points in satellite and other navigation solutions, even in dense urban environments and indoors. The closest U.S. equivalent might be Skyhook Wireless. However, the company triangulates more data than Skyhook. (Both AlterGeo and Skyhook have Intel among their investors).

Thus, today, it’s signed a deal with several large banks in Russia, who will now began to use AlterGeo’s location data when assessing online a borrowers’ credit rating. The company is not disclosing the names of its partner banks due, it says, to “a number of NDAs”.

Anton Baranchuk, CEO at AlterGeo, says their platform “allows our partners to learn more of their potential borrowers’ honesty and reliability in order to reduce risks when working with online credit loans.”

This new product consists of “geo-scoring”, which allows banks to “geo-identify each potential borrower and thus to draw conclusions regarding his/her solvency, honesty, and so on” said a spokesperson.

It’s perhaps concerning that the use of this technology may not be made obvious to the average consumer.

That said, as far as TechCrunch is aware this is a brand-new way of monetizing location information though what the privacy implications are (and in Russia) is hard to say.

Among AlterGeo’s clients are Mail.Ru Group and Badoo, mobile app developers, as well as advertising networks and agencies. The company’s current partnerships cover Russia and the CIS, Great Britain, France, Italy, Spain, Brazil, and several other countries and regions.

At one time was used by Yandex to improve location-based search but the partnership only last a few months until Yandex started using its own geo-location technology for location-based search.

Back in 2011 it raised $10m from Intel Capital and Almaz Capital and investor Esther Dyson.

The company now has three main products: The B2B hybrid positioning platform; the B2C AlterGeo location-based social network; and the B2C personalized restaurant guide Gvidi.

Personally, I’d be quite interested to know if my bank in London were tying my location to my credit rating. While I know this is done on postcode data, based on where you live, I’m pretty sure it’s not done on my Foursquare check-ins (at least I THINK it’s not).