Traity is a Spanish startup which builds the world on the basis of trust, with reputation being an asset which is useful when renting a house or getting a mortgage. To generate a reputational rating of a user, the blockchain platform runs analysis of the data available in social networks, comments at various resources such as Airbnb, and the people on the friends’ lists. Currently, Traity develops its products for the insurance and real estate markets. In Spain, US and UK landlords can choose tenants whose reputation is verified by Traity, while tenants can negotiate favorable conditions. Miguel Ángel Torres, Traity CFO, gave an interview to Invest Foresight and explained how reputation may be measured and whether it may become a passport substitute.
– You worked in Ministry of Economy, Industry, and Competitiveness for five years. Why did you leave? And how did you get into Traity?
– Once I had worked for PricewaterhouseCoopers and gained my professional experience in the fields of audit and finance, I obtained a license to sign financial audits, issued by the Ministry of Economy. At the same time, I wanted to be more and more involved in the new technological trends, and Traity was a very interesting project, given the space it occupies in the insurtech and fintech ecosystem.
– There is no more privacy. Today it is very easy to spoil the reputation. We must live as if our mother, boss, trainer, and enemies are watching us. And the increasing ‘transparency’ of the modern world is important to use to our advantage. What role does Traity play in this?
– Reputation is an important asset we own. Unfortunately, reputation is not always easy to prove, measure, port and take with us, especially in new environments. This limits our ability to trade, to be accepted and to be given opportunities in circles where we have not been before. Credit scores may help some people, but they are based on previous debt and many people fall outside their box. Our school grades, Airbnb reviews, the timely payments of our monthly rent, or recommendations from friends are all part of our reputations. In a world based on trust, and with millions of people without access to fair financial services and fair credit scores, we should be able to prove our reputation to others whenever it is important to us. That is exactly the role Traity want to play; our mission is to help people leverage and control their reputations for things that matter to them, to enable a trust-based economy.
– How does Traity work? Is your network of trust built on a blockchain? If not, what algorithms do you use? How do you verify the user’s reputation?
– Traity enables online citizens to build and port their reputational information from different data sources. Our risk scoring is built with machine learning and runs on blockchain. This means that a third party (a bank, an insurance company, an e-commerce marketplace, etc.) can write a blockchain based review through our APIs, and the users (normally, the customers of such third parties) can benefit from leveraging and porting their scores. This creates accountability loops that will reward the users for having good behaviours when using the different services, as it will contribute to their own risk scores. We currently have two streams of revenues:
Trustbond is a B2C product where we collect fees or premiums from users (tenants).
The Reputation Gateway is a B2B product where we provide user´s social scoring to banking and insurance industries mainly for risk assessment, receiving a small fee per each query to our API.
– What indicators do you use to measure the reputation? Users decide themselves what information they want to reveal in each case?
– We measure the reputation at three different levels: 1) Identity, checking if you are who you say you are; 2) Transactions, tracking your history as user of a concrete service (reviews and scores, recommendations, volume of transactions, etc.); and 3) Social, analysing your interactions, your network of friends, who are your followers, your education, homophily, etc. Users can choose whether they want their profile to be public (only the relevant information will be shown) or private (to give access to people that they choose to see their reputation score). We don’t keep the passwords from any of the sites users aggregate and they have a one-time use. We only store the information of the analysis rather than all the information from the different networks. Users can decide what goes in and out of their reputation profile, so they always have full control of their data.
– Can you please give an example of a practical application use of Traity?
– Trustbond helps people replace the rental deposit with trust. So if you are a tenant, instead of paying $2,000 upfront to your landlord for the deposit, Trustbond will take care of it for a premium of around $250. This gives the tenant a lot of cash flow benefits, and protects landlord with the same $2,000 amount that they need through a surety. The whole process of Trustbond only takes Traity social scores into consideration for eligibility. If you are a reputable member of Traity, you can get a Trustbond. This is an example of how people can take leverage from their data for their own benefit.
– At what stage is the company now? How many users are currently registered on Traity?
– Traity has over 4.5 mio registered users, but we are now focused on building products with which people can benefit from their own data. We are launching Trustbond in the UK market before the year-end, and exploring other European countries as well as other areas like Latam and Africa. The gap of trust between landlords and tenants is a worldwide issue, and we think we can solve it in a more efficient way than the current real estate market standards. We are also launching our blockchain based open source project the “Reputation Network”. The initiative aims to be the infrastructure that pulls together all of the other emerging alternative credit and risk scores. Users can prove that they are trustworthy quickly and more effectively, accessing the most relevant data and scores whilst controlling their personal data and protecting against privacy breaches.
– What are the most significant steps in the development of the company you would have highlighted?
– We have moved from the conceptual to the actual. During the first years of development we worked under the assumption that social online data could predict risk in contexts like renting and financial services. A reasonable assumption but one that had not been proven. Now we have tested and proven our algorithms over thousands of real customers and products and can rely on their predictive power.
– A larger round of about $700K with Horizons Ventures, Lanta, BDMI, and then a SeriesA of $4 mio with ActiveVP, Horizons Ventures, KRW Schindler, Lanta and BDMI. How much total money was invested in the startup for all time?
– Traity raised a total of $4.7 mio in funding over two rounds, the Seed round and the Series A. We are extremely fortunate to have a strong Board of Directors; they bring a breadth of experience and a high level of advisory support.
– There are other projects developing in the reputation space include Ontology and Fantom. They are working on distributed trust collaboration platforms. What do you think about competitors? What’s differs from your platform from them?
– Today, reputation is used in many very different ways (credit scores, rental and employment history, etc). Our solution respects human rights, privacy and the right to be forgotten. Other incumbent products and new projects focus on being “data marketplaces” or “big brother type” solutions and that vision do not fit well with our mission. We believe people should be empowered by their reputational data and should be in control of what they share and who they share it with. In the case of Ontology, they are building a decentralized ID framework (KYC) while due to our focus is on reputational data which is the layer above identity data.
– The cases of fraud are rampant. How likely is it that a user can hack your system and raise his reputation?
– We commonly get the question, can users game our algorithms by using fake accounts? We are confident that they cannot and have many different techniques to detect that type of use. We look for consistency among all the information provided at a network level. It may be easy for users to fake individual accounts but much harder to fake a network of accounts and that is what we look at. Secondly, we also adopt industry standard security controls to block any unauthorized accesses to our systems not only in order to avoid someone tampering their own data and increasing their final score, but what is as much as important, to not get access to other’s people personal information. Privacy and security need to be a top priority for us and this can only be achieved by building a security culture within the whole organization.
– Do you foresee a future where Traity replaces the use of passports?
– Why not? Today, we still need a physical document to proof who we are, and that does not make sense at all. The technology for a cloud-based virtual passports already exist. At the end, it is only a political issue, the necessary resources must be put in place to agree and coordinate a solution to the security and privacy challenges involved.
Traity try to see beyond, it is not only a matter of your identity, if you will be able to travel around the world without a physical document, you should also be able to take your digital reputation with you anywhere, proving your behaviour where needed.
– Do you have any dreams or expectations from mobile technologies that developers have not yet implemented?
– We envision a world where financial services are unlocked for thousands of unbanked or underbanked in the developing world. Financial services will allow the opportunities to these people that many of us take for granted. Mobile technologies are key to realising this vision and there is still much that can be implemented to create value.
By Olga Grinevich