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On the Rise of FinTechs: Credit Scoring Using Digital Footprints

Author

Listed:
  • Tobias Berg
  • Valentin Burg
  • Ana Gombović
  • Manju Puri

Abstract

We analyze the information content of a digital footprint—that is, information that users leave online simply by accessing or registering on a Web site—for predicting consumer default. We show that even simple, easily accessible variables from a digital footprint match the information content of credit bureau scores. A digital footprint complements rather than substitutes for credit bureau information and affects access to credit and reduces default rates. We discuss the implications for financial intermediaries’ business models, access to credit for the unbanked, and the behavior of consumers, firms, and regulators in the digital sphere. (JEL G20, G21, G29)

Suggested Citation

  • Tobias Berg & Valentin Burg & Ana Gombović & Manju Puri, 2020. "On the Rise of FinTechs: Credit Scoring Using Digital Footprints," The Review of Financial Studies, Society for Financial Studies, vol. 33(7), pages 2845-2897.
    • Handle: RePEc:oup:rfinst:v:33:y:2020:i:7:p:2845-2897.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhz099
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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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