Search history can calculate better credit ratings than pay slips, says International Monetary Fund

Your web search history plus records of the browser and device you use to make those searches could enable financial institutions to calculate you a more accurate credit rating than traditional methods, according to the International Monetary Fund (IMF). And the global finance organisation says the ability to use those records might be a good thing rather than a privacy nightmare.

The IMF’s thinking is on offer in a new blog post titled “What is Really New in Fintech” that finds just two truly novel things to discuss.

The post’s four authors – who work at the European Central Bank, the IMF, and the University of Amsterdam – say “new types of information” is one thing to watch out for.

“The most transformative information innovation is the increase in use of new types of data coming from the digital footprint of customers’ various online activities—mainly for credit-worthiness analysis,” they write, because factors like your income, employment duration, assets, and debts vary across the economic cycle. The result is that lenders get loose in good times but tighten up during downturns. The latter outcome helps nobody.

“Fintech resolves the dilemma by tapping various nonfinancial data: the type of browser and hardware used to access the internet, the history of online searches and purchases,” the authors write. With a little AI/ML fairy dust sprinkled on that data, the authors say: “these alternative data sources are often superior than traditional credit assessment methods.”

When such data produce better results, the authors argue it can “can advance financial inclusion, by, for example, enabling more credit to informal workers and households and firms in rural areas.”

The post’s second new thing to watch is “new communication channels” that allow the likes of Facebook, Amazon.com and Alibaba to offer a platform for financial services companies that challenge existing players.

Facilitating competition and doing it online and therefore without requiring time-consuming branch visits, “generally improves customer convenience and makes financial intermediation more cost-efficient.”

What could possibly go wrong with Facebook, Amazon and Alibaba using AI and your browser records to facilitate offers from third-party financial services? Thankfully, the authors can find plenty of potential pitfalls, including security worries, changes in lending behaviour that challenge prudential regulation regimes, and the potential for new players to weaken banks and by doing so undermine the role they play in the wider financial system….[    ]

What do you think?

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yeuk
1 month ago

This is a good reminder that Big Tech is NEVER your friend.

nacket
1 month ago

How can they possibly infer credit ratings from search histories. No guy would ever get a loan because all they would find is porn.

bolide
1 month ago

Of course this is coming from Europe and IMF: they never really valued freedoms and civil liberties like privacy. They are all little fascists in the making.

laser
1 month ago

And that’s what you call Social Credit just ask the CCP.

Nailed It
1 month ago

Sites like YouTube won’t even allow you to view content if you’re using Onion browser

Me Too
1 month ago

Good thing I have bad credit already. Get ready for the great reset because this sounds like the start of getting rid of conservatives only.

Devin Kim
1 month ago

Well that’s my credit score screwed then.

teg
teg
1 month ago

This is one of the scariest and most invasive things that I have EVER heard. I am going to go live in a bunker in Wyoming. It’s been nice knowing you all.

miceage
1 month ago

I guess we’re all Chinese citizens now. Thanks demoncrats!

Space Marine
1 month ago

I just did an internet search for “How to disband the IMF”! I guess my credit score is going to continue to be in the tank!! Oh well.

RV
RV
1 month ago

Democrats approve this message..

Zilverbacks
1 month ago

“Lobbying” means paying off our thoroughly corrupt Congress to pass laws that favor the IMF, no matter the harmful consequences to us citizens.

American
1 month ago

It’s almost as if the conspiracy theorists were right

LB 9
1 month ago

China has a very similar system in place, ask China’s citizens what happens to them when they fall out of line with their credit scores.

melves
1 month ago

To those who want a collectivist form of BIG government, this is what it leads to. A complete takeover of your life.

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