BSP urges use of alternative data for credit scoring – Manila Bulletin

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The Bangko Sentral ng Pilipinas (BSP) encourages banks to use other alternative sources or data such as social media and online transactions for credit scoring.

Alternative data in performing credit scoring uses mining or digital fingerprints and other telecommunications data, not just traditional bank accounts.

“Using alternative data for credit scoring is just one example of how data can be used to benefit consumers,” BSP Governor Benjamin E. Diokno said in a recent webinar on the technology event organized by FinTech Alliance Philippines and TransUnion Philippines. “We must continue to take initiatives to foster an inclusive digital financial ecosystem,” he said.

The BSP urges financial institutions to explore the use of non-traditional consumer data “to design, improve and deliver financial services” as the alternative data will provide a “complete picture of the customer (thus) enabling more individuals and companies to be evaluated. “

The central bank said that unlike traditional data such as bank transactional data and credit bureau information, alternative data comes in many forms, including social media, mobile data, utility data, data behavioral, online transactions, geolocation data and browser data, among others.

BSP said credit forecasting “is a promising alternative data use case”, especially for micro, small and medium enterprises and other sectors of Philippine society that have no credit history. strictly speaking.

Last September, the BSP conducted a “quick survey” which concluded that using alternative data would result in better customer profiling, better pricing of loan products and lower default rates.

“Although it took an average of two years for the benefits to be realized, the potential is significant,” BSP said, citing Diokno who suggested the potential benefits of non-traditional consumer data for credit scoring.


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