The International Monetary Fund (IMF), that staunchly supports and props up central banks and consequently physical banks operating with centralized currencies, seem to be studying ways to make sure their financial services are solidified, as they could be looking for inspiration in “fintech” and Big Tech behind it.
But IMF researchers chose to focus on those points where the image of the likes of Apple, Facebook, Amazon, Alibaba, etc., tends to suffer the most, and that is their habit of tracking and profiling users for money.
Although these days this mostly happens so that user data can be sold to advertisers, the IMF sees potential in Big Tech's access to all this data, such as someone's browser history, in determining their credit rating in much more efficient ways than traditional banks are capable of doing right now.
Referring to the use of artificial intelligence and machine learning, the paper says that in addition to browsing and online purchasing history, fintech also has ways of identifying users by their device, and that this increasing mass of data left by people, revealing their habits and everyday lives is changing the game, that may help bring in those 1.7 billion “unbanked” people worldwide – i.e., allow them to take out loans from banks.
China has pioneered this type of determining credit score, a part of the “social credit system,” helping individuals and small business previously ineligible to get loans, but this carries with it the extra price of Big Brother-like mass surveillance. In the west, citizens are currently traced for the way they pay off debt, allowing banks to determine their credit score. In China, many other aspects of people's lives are closely monitored and assessed for financial reliability.
Without mentioning that, the IMF says that credit assessment relying on massive amounts of personal data harvested by Big Tech is superior to the current methods, and would let “informal workers” (likely an euphemism for illegal migrants) and rural farmers take out a loan, too.
The paper, that acknowledges Big Tech not only has this data and methods at its disposal but also uses them as they slowly become financial powerhouses, is dedicated to new trends in fintech, but doesn't deal directly with Big Tech's cryptocurrency attempts like Facebook's Libra.