AzFintech: Digital Footprint Engine for fin tech, eKYC
AzFintech: Digital Footprint Engine for Fintech, eKYC
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. We show that even simple, easily accessible variables from the digital footprint equal or exceed the information content of credit bureau scores. The digital footprint complements rather than substitutes for credit bureau information and is informative even for customers who do not have credit bureau scores. We discuss the 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.
The growth of the internet leaves a trace of simple, easily accessible information about almost every individual worldwide – a trace that we label “digital footprint”. Even without writing text about oneself, uploading financial information, or providing friendship or social network data, the simple act of accessing or registering on a webpage leaves valuable information. As a simple example, every website can effortlessly track whether a customer is using an iOS or an Android device; or track whether a customer comes to the website via a search engine or a click on a paid ad. In this project, we seek to understand whether the digital footprint helps augment information traditionally considered to be important for default prediction and whether it can be used for the prediction of consumer payment behavior and defaults. Understanding the importance of digital footprints for consumer lending is of significant importance. A key reason for the existence of financial intermediaries is their superior ability to access and process information relevant for screening and monitoring of borrowers.
