Personal Democracy Plus Our premium content network. LEARN MORE You are not logged in. LOG IN NOW >

Can Data About Mobile User Behavior Build a Credit Score?

BY Julia Wetherell | Wednesday, January 30 2013

Cignifi generates credit scores from data collected on mobile users.

In some emerging economies, consumers seeking to take out a loan or sign up for a credit card can face a significant hassle: not having the credit history to prove monetary responsibility. Now several organizations are aiming to help potential borrowers by looking a non-traditional line of credit into consideration: mobile phone use.

Evgeny Morozov at Slate has an overview of several initiatives that are using social media and mobile data to formulate a kind of proxy credit score. In BRIC countries and other emerging economies, where cell phone use is often more widespread than the Internet, mobile is the prevailing force. Cambridge-based start-up Cignifi has built modeling software that can purportedly make a judgment call on whether a loan applicant is a worthy prospect for a lender by analyzing at patterns of mobile activity — such as timely payments and the hours and duration of phone calls. The program, which was tested with 3 million mobile subscribers in Brazil last year, comes up with a numeric rating — similar to a US credit score — based on mobile habits.

If adopted for widespread use, this method of credit scoring could open up an untapped wealth of clients to financial services companies. Cignifi hopes to monetize the platform by partnering with providers in various countries — next in Mexico, soon in the other BRIC nations. But mobile companies are already catching up: last year Safaricom, the major provider in Kenya, precluded the need for a mitigating party by looking at its own customer data to evaluate borrowers for its micro-lending and m-banking service M-Shwari.

Using existing data to streamline the credit process could have significant benefits for emerging economies — encouraging investment and aiding small business. Yet Morozov points out the ironic disparity between mobile users trading personal data for loan qualification, and the wealthy stockpiling expensive privacy software the prevent that access:

In yet another puzzling paradox of the modern age, the rich people are spending money on expensive services that protect their privacy and improve their standing in Google's search results, while the poor people have little choice but to surrender their privacy in the name of social mobility.

In a hyper-connected, hyper-shareable world, where personal information is so often voluntarily divulged, it seems important to remember that privacy is still a privilege — one that many may not be able to afford on the path to prosperity.

Personal Democracy Media is grateful to the Omidyar Network for its generous support of techPresident's WeGov section.

News Briefs

RSS Feed friday >

First POST: Overreaching

Why the FCC balked at the Comcast-TimeWarner deal; Sheryl Sandberg wants Hillary Clinton to lean into the White House; the UK's Democracy Club brings a lot more information to election season; and much, much more. GO

thursday >

First POST: Ownership

"Tell us more about your bog"; the shrinking role of public participation on campaign websites; "Aaron's Law" has been reintroduced in Congress; is the Comcast-TimeWarner merger on its last legs?; and much, much more. GO

wednesday >

First POST: Bush League

Presidential candidates hiding behind Super PACs; what this means for American democracy; demos at the White House; a demand for Facebook to be more open about news in the newsfeed; and much, much more. GO

tuesday >

First POST: Glass Half Full

A new Pew study on open government data in the US; the FOIA exemption ruffling transparency advocates' feathers; social media bot farms; and much, much more. GO

monday >

First POST: Zucked Up

Mark Zuckerberg responds to criticism of "zero rating" Facebook access in India; turning TVs into computers; how Facebook is changing the way UK users see the upcoming General Election; BuzzFeed's split priorities; a new website for "right-of-center women"; and much, much more. GO

More