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IMF researchers: digital footprint yields better credit assessment

blogs.imf.org

11–20 of 165 posts

Re: IMF researchers: digital footprint yields better credit assessment

#11
post #9
post #2

[Edit: no longer relevant, see replies] No it doesn't? This is the only part of the post relevant to the headline: > The second and most complex problem is that certain kinds of people, like new entrepreneurs, innovators and many informal workers might not have enough hard data available. Even a well-paid expatriate moving to the United States can be caught in the conundrum of not getting a credit card for lack of cr…

Submitted title was "IMF says credit score should incorporate browsing history". That was egregious editorializing. Submitters: please don't do that! Cherry-picking the most sensational detail and making that the title is definitely not ok, and fabricating something the article doesn't say is right out! https://news.ycombinator.com/newsguidelines.html When a title buries the lede in favor of bland corporate rhetoric,…

dang, as I'd just sent you in email, this is a really tough call, and the article itself is largely to blame.

The submitted title was very clearly editorialised. But both the original title and the entire article text are so anodyne as to make an accurate 80-character precise of the submission as HN requires all but impossible.

The implied violations of personal privacy, third-party doctrine, intellectual freedom, and more, are staggering. I'd hope (though I also begin to doubt) that search engines, browser providers, ISPs, and even online merchants would rebel at all aspects of this proposal.

At the same time, the article highlights numerous issues that seem to be reaching a breaking point:

- Wage-based or even salary-based compensation, during time of global pandemic and lockdown, aren't sufficient.

- Credit is (and has for decades) been used to supplant sufficient living wages for vast portions of the population.

- A necessary foundation of a global p2p or b2c commercial system is sufficient trust on both sides of that transaction that parties will uphold their ends of the bargain, and that neither side has been conmpromised, internally or externally, in such a way as to commit fraud. In-person, cash-on-the-barrelhead transactions solve many of these problems. Local-dealing similarly. Globally we're trying to supplant intrinsic trust mechanisms with mediated ones, with varying degrees of success and tremendous amounts of unintended consequences.

Rather than put all my article responses in this subthread (which likely will and should get reaped to the bottom of the discussion), I'm hoping to write up my thoughts separately. I just want to make clear that this is as subtle a proposal as, oh, say, "Proposal for large-scale passenger handling logistics using IBM tabulation equipment in the central European region" would have been in 1939. This is absolutely horrific, and an exquisite example of Arendt's banality of evil.

Arnoud Boot, Peter Hoffmann, Luc Laeven, Lev Ratnovski are names that should appear in business and privacy case-history courses for decades.

"Browser, hardware, search and purchase history in Fintech credit assessment" is my best spin. 77 characters. Kinda-sorta falls out of that buried paragraph number 6.

Re: IMF researchers: digital footprint yields better credit assessment

#13
post #2

[Edit: no longer relevant, see replies] No it doesn't? This is the only part of the post relevant to the headline: > The second and most complex problem is that certain kinds of people, like new entrepreneurs, innovators and many informal workers might not have enough hard data available. Even a well-paid expatriate moving to the United States can be caught in the conundrum of not getting a credit card for lack of cr…

Shouldn’t credit scores be an incentive to become a more thrifty and financially conscientious citizen? I can hardly see how knowing the hardware of my browser is going to incentivize me to spend more responsibly. I can only see this serving in the interest of banks who can grade me as a marginally safer investment.

This seems to be in need of regulation. Unfortunately, Liz Warren was the biggest advocate for consumer financial protection and her state’s governor is a Republican which means she can’t have a Cabinet position because her governor would appoint a Republican to her seat and upend the current Democratic Senate majority. Seems like we’ll be walking toward a social credit system like China after all.

Re: IMF researchers: digital footprint yields better credit assessment

#15
I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc.

And strangely (or not) this blog post from the IMF barely touches on the huge privacy concerns with this stuff.

Re: IMF researchers: digital footprint yields better credit assessment

#16

Truly a dystopian world we are entering. Now more than ever is the time for funding and developing alternative tools that utilize decentralization. What's coming cannot be stopped but it can be broken.

Now how do I explain to my mom that her conspiracies do occur, the influential wealthy groups do exist and lobby governments, but that they have nothing to do with the independent data mining and data brokering companies which anyone can start right now

Re: IMF researchers: digital footprint yields better credit assessment

#17

I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc. And strangely (or not) this bl…

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

Re: IMF researchers: digital footprint yields better credit assessment

#18
post #9

Earlier quoted context omitted.

Submitted title was "IMF says credit score should incorporate browsing history". That was egregious editorializing. Submitters: please don't do that! Cherry-picking the most sensational detail and making that the title is definitely not ok, and fabricating something the article doesn't say is right out! https://news.ycombinator.com/newsguidelines.html When a title buries the lede in favor of bland corporate rhetoric,…

That wasn't intended to be editorializing or picking a sensational detail. Rather, I found that to be the most relevant point and believed that it would be most salient to HN. I certainly wouldn't call it fabrication; it explicitly states that this data could be used to qualify many people for better credit, doubtless via some credit score system or similar. I think this quote best lays out that position: > Recent re…

Rather, I found that to be the most relevant point

That's what editorializing is. You can point out the thing you found salient in a comment, you can find another piece that better represents the interesting thing, etc. You can't make up the title, though.

Re: IMF researchers: digital footprint yields better credit assessment

#19

I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc. And strangely (or not) this bl…

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

Let me illuminate the problem:

s/tall/black/

(inb4 downvotes)

Re: IMF researchers: digital footprint yields better credit assessment

#20

I hope that regulatory agencies start cracking down on these "alternative sources" for credit-worthiness data. Researchers have shown how it's very easy to attribute things like political party, race, sexuality, etc., things that are often illegal to take into consideration when determining credit, to other things like where you live, TV shows you like, apps you have on your phone, etc. And strangely (or not) this bl…

If these sources of data are actually more accurate predictors of creditworthiness, then shouln't we be applauding their use? If it so happens that tall people are less likely to repay loans, why is it wrong to charge tall people higher interest? Otherwise aren't we just socializing the cost imposed by artificially fuzzy criteria?

Credit worthiness is directly used on job applications etc, so it feeds back into people’s ability to pay back loans. As such accuracy isn’t an independent variable it’s part of a larger system. We don’t want to artificially make people with for example long fingers unable to pay back loans. As such you want to avoid feedback loops even at the cost of some accuracy.
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