Humboldt University Berlin
Institutional Affiliation: Humboldt University
NBER Working Papers and Publications
|April 2018||On the Rise of FinTechs – Credit Scoring using Digital Footprints|
with Tobias Berg, Ana Gombović, Manju Puri: w24551
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.