Alternative Scoring, a new form of trust in consumer finance industry.
Would you trust a stranger with your hard-earned money? I doubt it.
In the world where credit rating means someone’s access to formal financial resources such as loans, credit cards or mortgages, it is the same world that abandons 1.7 billion people behind. The same way we don’t trust people we have no background information about, institutions don’t trust us.
Credit reports are the source of background information of each individual which institutions receive from Credit Bureaus, to decide whether they can trust their lenders.
What about those who do not have formal records? This is where Alternative Scoring steps into the big picture. Since credit bureau’s data in emerging markets could be scarce or rarely accurate, alternative scoring is a new form of data collection on each individual based on different criteria depending on each provider.
What are the existing Alternative Scoring based on?
Social Media data or other online behaviours: There are service providers whose credit scoring derive from users’ social media history and online behaviours, determining their default risk as well as their payment behaviour based on the online logs such as CredoLab, Lenddo and Friendly Score. Each of the provider compiles information with other criteria unique to their product.
Mobile Data: Tala Mobile operates in many emerging markets and evaluating the financially invisible people by retrieving information from their smartphones, including geographic patterns.
Psychometrics: EFL offers personality test to customers in order to evaluate their financial habits and provide risk management for financial institutions.
BFEX’s alternative scoring also contributes a new product to this growing industry called DSTCS (Decentralised Social trust Credit Scoring) BFEX intends to permeate the emerging markets where formal credit scoring hasn’t been distributing adequate power to the people who deserve it the most. DSTCS analyses user’s information ranging from personal information, social media history and numbers of neighbours/friends. Moreover, clients are able to enhance their credit scoring with BFEX. How?
BFEX launches the Spotlight application which would be connected to customers’ favourite application for habit building. The information will be collected and analyze into user’s own rating which will be utilised on BFEX’s peer-to-peer lending platform.
There are various types of alternative scoring that users can choose from and it is important to use the one with friendly user experience application. BFEX makes sure to provide our users the application with one-stop solution they are looking for.
For further information on BFEX: https://bfex.io
Peer to peer lending, joining the popular league: https://medium.com/@bfexofficial/peer-to-peer-lending-joining-the-popular-league-9869d8e27c1f