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Does Alt Data Tilt Bargaining Power in Relationship Lending? Evidence from Borrowers' Premium Customer Base

Author

Listed:
  • Mensah, Albert

    (HEC Paris - Accounting and Management Control Department)

  • Asante, Fred

    (Cornell University)

Abstract

Relationship lenders extract rents by leveraging private borrower information unavailable to outside lenders. We examine whether alternative data (hereafter, "alt data") can narrow this gap. Using digital foot-traffic data, we construct an iOSshare measure capturing customer-affluence information that historically only relationship lenders could infer. Increases in this measure reduce loan spreads for relationship borrowers, after controlling for both ex-ante and ex-post changes in credit risk. The residual spreads beyond credit risk adjustments are consistent with a decline in economic rents. The results indicate that alt data diffuse borrowerspecific customer information to competing lenders, diminish informational holdup, and ultimately tilt bargaining power towards borrowers in relationship lending.

Suggested Citation

  • Mensah, Albert & Asante, Fred, 2025. "Does Alt Data Tilt Bargaining Power in Relationship Lending? Evidence from Borrowers' Premium Customer Base," HEC Research Papers Series 1616, HEC Paris, revised 19 Feb 2026.
    • Handle: RePEc:ebg:heccah:1616
    DOI: 10.2139/ssrn.5954036
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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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