IMF: "credit scores could soon be based on web browsing history"

30 Replies

The International Monetary Fund (IMF) has published the results of research conducted into how lenders are likely to be doing their business in the future, and what new information and personal data these companies plan to start asking from borrowers in order to determine their credit score.

The biggest takeaway is the seemingly inevitable shift from merely accessing credit information to also incorporating people’s online behavior into the process of deciding whether to lend them money necessary, for example, to buy a house.

Compared to the way the system now works in most countries – these changes, which are expected to be coming soon, look fairly invasive privacy-wise, and with no “vision” of proper safeguards. Banks and others will go as far as to access personal browsing and shopping history. This would be done by allowing automated systems, powered by algorithms, to harvest the data and turn it into credit reports.

From the report:

“The use of non-financial data will have large effects on the provision of financial services. Traditionally, banks rely on the analysis of customer financial information from payment flows and accounting records. The rise of the internet permits the use of new types of nonfinancial customer data, such as browsing histories and online shopping behavior of individuals, or customer ratings for online vendors.”

Currently, those hoping to take out a loan can expect to have their repayment and credit history length, as well as total debt checked, but going forward, the IMF study suggests, this will be expanded to include what’s known as people’s digital footprint – either collected from data already publicly available, or that obtained by credit bureaus.

The stated goal is to improve “loan default predictions” – and the upcoming trend is sold as a way to give access to money to people who have previously been unable to use loans because their status is “unscorable.” Also known as “credit invisibles,” these are mostly low-income minorities and immigrants, and having access to their personal habits and behavior as exhibited on the internet is supposed to help banks and other lenders “profile” them precisely enough to determine if they should be given a loan.

On the other hand, citizens who are “scorable” but whose score is low might suffer in the new system now in the making, as their online activity could persuade lenders to cut them off from access to money.

Although the move in this direction looks inevitable, some key answers are missing: what data scraped from the internet will be used to determine someone’s credit rating, and how it will be secured.

IMF’s post warns, however, to expect an “efficiency-privacy trade-off.”

https://reclaimthenet.org/imf-...

That is how it works in China.  It is seems to be an effective way of controlling people.  You just take away peoples god given rights and replace them with privileges granted by the government.  Or if they say things you don't deem good for society you take their privileges away.

The other day Biggerpockets took a couple of my posts down and I got a little prickly not because I think I have the right to say what I want on their forum, but because businesses predictably try and play it so safe and they won't even stand for the values that give them the right to be in business.  After all if businesses won't defend their longterm interests who the heck is going to?  

Originally posted by @Lindsay Kramer :

So basically, we're looking at a future where it'll be okay to deny loans to furries? Hmmmmmm 

 That would certainly explain the extreme response from the guy who posted right before you.

Ill still lend to Johnny Drama and Turtle though. 

Originally posted by @Eric Bilderback :

That is how it works in China.  It is seems to be an effective way of controlling people.  You just take away peoples god given rights and replace them with privileges granted by the government.  Or if they say things you don't deem good for society you take their privileges away.

The other day Biggerpockets took a couple of my posts down and I got a little prickly not because I think I have the right to say what I want on their forum, but because businesses predictably try and play it so safe and they won't even stand for the values that give them the right to be in business.  After all if businesses won't defend their longterm interests who the heck is going to?  

I don't know if I agree with the lending score thing and internet searches at all - I haven't thought long enough about it - but I don't particularly see how a private company, using their own scoring systems, denying you a loan because of your internet history has anything in common with the Chinese government. Are you saying that private businesses that give you loans shouldn't be able to come up with their own arbitrary reasons for denying that loan?

As for the posts and getting prickly, I didn't see everything that transpired but tried to explain that reasonably a couple of days ago, yet you insist on relitigating the matter. You don't have to like BP's rules and you always have the freedom to take your speech elsewhere. I'm pretty certain no one at BP asked you to defend their values or interests. 

Originally posted by @Eric Bilderback :

@Russell Brazil

Do you really think it is extreme to not want companies collaborating to decide what services/products/opportunities you will eligible for based on your political or personal preferences?  

 If being a Furry is your thing, all the more power to you.  If it stops you from getting a loan, just take off the costume. 

Thank for the opportunity to respond to you it is a nice change,

The Chinese government started a social credit score that our big tech titans helped design over the Chinese people,  They use this to keep tabs, punish and encourage behaviors of their people/subjects.  I would think most Americans would find this offensive on its face (maybe I am wrong about that).  The concern is that big tech, banks, and the rest of the multinational corporations will be more than happy to sell out the American people and use and implement the same systems they have used in other places like China right here in the West.  To sum it up people will not be able to speak their minds because they will be at the mercy of Woke Inc., which I could be wrong but you seem to think is acceptable.  I don't think it is acceptable, that seems to be our disagreement.  

My point was not so much that I wanted to relitigate, or act BPs interest but that BP and other businesses are short sided.  Lenin said it better than I ever could, "The capitalists will bid on the rope we use to hang them."

Hey man again I am coming off like I am not a nice guy here, but I am!  I am super passionate about some of these issues but I wish you all the best my friend sorry for any offense.  Have a great night!

Originally posted by @Russell Brazil :

 That would certainly explain the extreme response from the guy who posted right before you.

I don't appreciate the implication, but whatever.

How is it "extreme" to desire privacy?

We can see how social credit scores will be used to restrict liberties in the future. It's right there in the white paper. If no one fights it, that is the future we will get.

@Eric Bilderback   @Nate R.  I've used instagram for the same reasons everyone does (mainly sharing funny stuff with friends) but I've also made a decent little lead generation tool out of it.  However, I've noticed that as I share (in story or private message) or "like" more Pro Constitution/Anti Big Government type posts that my engagement goes way down meaning fewer people have my stories come up in their feed, come across my posts, etc.  Go figure. I never post anything offensive but it's very clear that big tech will filter out certain types of profiles based on activity.  

Anyone can test this out for themselves if they'd like to post anything that goes against the woke narrative. 

There's a huge % of our country which votes to give up more of their privacy and freedom every time they're given a ballot whether or not it's in their best interest because doing so typically has some "feel good" gift wrap so we find ourselves in a tough situation as social media/tech/business/finance/foreign interests collide under these conditions. 

Originally posted by @Jeff He :

@Ramon E Alvarez

Haha, knowing banks and their abilities to build tech...it would be a century before they get anywhere close. Anyone who has used a bank's mobile app will tell you more bad things about it than good things.

The big banks cannot adapt fast enough and are being replaced by Fintech upstarts. There are companies that underwrite loans using AI, companies building decentralized finance around cryptos, etc. There is a firehose of data and more data will be collected in the future, providing suitable samples to develop accurate credit scoring algorithms. It's fairly easy to identify someone by their traffic and browsing history, and ISP's sell this kind of data to online advertisers (which is why I should use a VPN, but I'm too lazy). Eventually an id could be required to use the Internet, and surely the next big manufactured crisis will be used to advocate for such restrictions.

Originally posted by @Alex Bekeza :

@Eric Bilderback   @Nate R. I've used instagram for the same reasons everyone does (mainly sharing funny stuff with friends) but I've also made a decent little lead generation tool out of it.  However, I've noticed that as I share (in story or private message) or "like" more Pro Constitution/Anti Big Government type posts that my engagement goes way down meaning fewer people have my stories come up in their feed, come across my posts, etc.  Go figure. I never post anything offensive but it's very clear that big tech will filter out certain types of profiles based on activity.  

Anyone can test this out for themselves if they'd like to post anything that goes against the woke narrative. 

There's a huge % of our country which votes to give up more of their privacy and freedom every time they're given a ballot whether or not it's in their best interest because doing so typically has some "feel good" gift wrap so we find ourselves in a tough situation as social media/tech/business/finance/foreign interests collide under these conditions. 

People in the alternative news, natural health fields are already aware that they're being throttled, and some of the content creators I follow have been deplatformed from IG and others for simply posting on "controversial" topics or linking to CDC data.

I think the "Govopoly" as famous trader Ed Seykota calls it is more like a cancer than the duckweed he compares it to. Either way, it is exponential growth that eventually smothers the host.

As Alexander Fraser Tytler wrote:

“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.

Or, as Ben Franklin famously quipped:
“Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.

Neither these guys could have foreseen the efficiency with which technology could be wielded by corporations, government and the technocratic elite to control society.

@Ramon E Alvarez tracking this for a slightly different angle I think this is troubling for similar reasons that the current environment in this country is troubling—data is being shared and pooled and sold just like this rich now in the name of selling you things. Algorithms that tailor choices are in fact controlling your environment, not sure why it’s better if it’s for capitalist purposes.

What the IMF is really saying is “you know banks should really catch up to the market here.

And yea, the monitoring and social media stuff by govt is scary too—right now the only real “defense” is obscurity and a strong legal system. Both under threat

@Nate R. interesting thread.  I am going to ask a question that may take us further afield and potentially off-topic... but I am also going to tie it back to real estate!  Here goes.

You said "The big banks cannot adapt fast enough and are being replaced by Fintech upstarts."  Isn't this... not the case?  To be clear, I wish that it were... but I've been pretty disappointed at how much Fintech upstarts haven't done this.  I guess you could argue that it's because of regulation that favors the established big banks... but again, it's still the case so far.  So I'm still waiting for the Fintech!  And, there are even some big bank products that are pretty good - for example, Zelle.

Real estate tie-in: I use Zillow Rental Manager and have been pretty happy with it.  Is Zillow Fintech?

Thoughts?

Originally posted by @Nicholas L. :

@Nate R. interesting thread.  I am going to ask a question that may take us further afield and potentially off-topic... but I am also going to tie it back to real estate!  Here goes.

You said "The big banks cannot adapt fast enough and are being replaced by Fintech upstarts."  Isn't this... not the case?  To be clear, I wish that it were... but I've been pretty disappointed at how much Fintech upstarts haven't done this.  I guess you could argue that it's because of regulation that favors the established big banks... but again, it's still the case so far.  So I'm still waiting for the Fintech!  And, there are even some big bank products that are pretty good - for example, Zelle.

Real estate tie-in: I use Zillow Rental Manager and have been pretty happy with it.  Is Zillow Fintech?

Thoughts?

I might have exaggerated the threat of the "upstarts" a bit. Also, I guess I proposed a false dichotomy where only fintech upstarts offer innovative products. 

Is PayPal an upstart or are they now a big, established financial company? They have KYC procedures and seem to be heavily regulated like a bank, and they're tied to the traditional banking system. What about Square? It is making big investments in Bitcoin.

In our terminal version of capitalism, the large corporations, through regulatory capture and monopoly trade practices, gobble up the competition. Many of the innovative companies today will probably become "features" in established companies. 

The point I was trying to make earlier is that the Brave New World that the technocrats want is much closer than people realize.