NATIONAL BUREAU OF ECONOMIC RESEARCH
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On the Rise of FinTechs - Credit Scoring using Digital Footprints

Tobias Berg, Valentin Burg, Ana Gombović, Manju Puri

NBER Working Paper No. 24551
Issued in April 2018, Revised in July 2018
NBER Program(s):Corporate Finance, Productivity, Innovation, and Entrepreneurship, , Development Economics, Development of the American Economy

We analyze the information content of the digital footprint – information that people leave online simply by accessing or registering on a website – for predicting consumer default. Using more than 250,000 observations, we show that even simple, easily accessible variables from the digital footprint equal or exceed the information content of credit bureau scores. Furthermore, the discriminatory power for unscorable customers is very similar to that of scorable customers. Our results have potentially wide implications for financial intermediaries’ business models, for access to credit for the unbanked, and for the behavior of consumers, firms, and regulators in the digital sphere.

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Document Object Identifier (DOI): 10.3386/w24551

 
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