A small group of financial services companies targeting select audiences are using data from Facebook and other online accounts to help determine the credit-worthiness of a potential borrower. One company, Lenddo — which operates in Colombia, Mexico and the Philippines — checks to see if a possible customer is friends on Facebook with an existing customer who was late in paying back their loan. In addition to perusing social media accounts, another company, Kreditech, actually tracks how a person completes their online application, taking off points for such things as typing in all-caps.
Subscribe for counterintuitive, surprising, and impactful stories delivered to your inbox every Thursday
What’s the Big Idea?
Most financial services companies still prefer to look at a person’s credit history through traditional means, like FICO scores. However, Kabbage co-founder Marc Gorlin, whose company specializes in giving out cash advances to small business owners, says that by including information from borrowers’ eBay and PayPal accounts alongside the credit score, “[w]e can get much better, faster data.” Credit expert John Ulzheimer says that despite FICO’s limited number of determining factors, it’s “incredibly predictive of risk…To me, using social media is a little bit dangerous.”
Within the field of artificial intelligence, a new Japanese initiative promises to further blur the line between human and machine. A group of AI researchers at Japan’s National Institute of Informatics just […]