International Monetary Fund (IMF) researchers have outlined how fintech has changed the way companies think about credit.
It is not a secret that our web history is being tracked. In many ways, such as putting products we’re likely to want in front of us, there are benefits to the privacy intrusion. However, as fintech continues its rise as physical banks slump, we are seeing trends some might consider startling.
Unlike traditional banks, which have used financial data to determine if creditworthiness, online search, and social media have become major predictors for fintech companies.
“Fintech resolves the dilemma by tapping various non-financial data: the type of browser and hardware used to access the internet, the history of online searches and purchases. Recent research documents that, once powered by artificial intelligence and machine learning, these alternative data sources are often superior to traditional credit assessment methods, and can advance financial inclusion, by, for example, enabling more credit to informal workers and households and firms in rural areas,” said a blog detailing research by IMF staff.
According to the research, these new and controversial measures are superior to the previously used assessments of risk.
With their emphasis on data collection, companies like Facebook and Amazon have surpassed the abilities and knowledge of our financial institutions – creating a complete picture of each of its users.
While the research touches on privacy and policy related to this data harvesting, little is mentioned in terms of remedying such concerns.
Supporters of this data-driven approach don’t agree with the ubiquitous, dystopian cynicism. With this non-conventional approach, they argue, groups who have long been ignored by banks – such as immigrants and young Americans – may finally have access to credit.
Where do you stand?
Right back to the shadow government nd the big rich banks screwing you over for some goofy butt reason all because they were spying on you against the laws we created. Why aren’t they in jail?
They aren’t in jail because of the golden rule.Not the biblical one but the one tha says they with the gold rule..