How to use social media for a good credit assessment?
Posted: Mon Jan 20, 2025 4:14 am
Financial institutions are increasingly using new tools to assess credit . Some of them are specializing in identifying customer behavioral traits in order to prevent their customers from defaulting on their loans.
In a country like Brazil, where 116 million people are connected to the internet, social networks can say a lot about each person.
Social networks and credit assessment
The process of using social media as an ally in credit assessment is taiwan whatsapp data quite recent. The companies that use these tools the most are mainly fintechs, companies that combine technology with financial services.
Doctor and Academic Coordinator at Saint Paul Business School, Lilian Carvalho recalls that before social media, credit assessment required an extra effort on the part of the bank to identify whether what the customer was saying was true or not.
“Back then, there was no such thing as geolocation. So, depending on the case, we were advised to visit clients to see if what they were saying was real. With the tools available today, all we need to do is cross-reference some data with maps on the internet and we can identify whether the information is true or not,” he says.
With so many tools, applications and social networks themselves, companies can now analyze their customers' lives much more quickly and easily.
By visiting a person's profile, you can find out, for example, whether the income they show they earn is compatible with what they declare.
“Regarding social networks, we already perform text analysis to identify risk propensity or personality type. It will show how risky or not that client is, or how impulsive or less impulsive they are. Certain types of words are associated with certain personality types. And this use of text is increasingly sophisticated in terms of credit assessment as well,” explains Lilian.
A very practical example of this is when a company that requests credit claims to have commercial representation throughout the country. The institution can, based on geolocation, compare whether the addresses provided actually exist. Or even in situations where the person claims to be in a difficult financial situation, but posts photos in expensive restaurants and frequently attending parties.
Companies are betting on this alternative analysis
When it comes to social media and credit assessment , foreign companies are leading the way in adopting new methods to analyze whether a person is likely to default on their payments. In Brazil, there are still few companies that have adopted such measures, but some are already setting an example.
As we said before, fintechs are the ones that are most committed to using new tools to assess their customers’ credit . The Philippine-based Lenddo , for example, uses big data, machine learning and social network analysis. At Banqu , the use of blockchain helps to give a financial identity to those who cannot access global markets, despite having the capacity to produce and escape poverty.
Another example comes from the United Kingdom, where the country's largest insurer, Aviva , identified 10 financial personality types to indicate which one the saver fits into.
In a country like Brazil, where 116 million people are connected to the internet, social networks can say a lot about each person.
Social networks and credit assessment
The process of using social media as an ally in credit assessment is taiwan whatsapp data quite recent. The companies that use these tools the most are mainly fintechs, companies that combine technology with financial services.
Doctor and Academic Coordinator at Saint Paul Business School, Lilian Carvalho recalls that before social media, credit assessment required an extra effort on the part of the bank to identify whether what the customer was saying was true or not.
“Back then, there was no such thing as geolocation. So, depending on the case, we were advised to visit clients to see if what they were saying was real. With the tools available today, all we need to do is cross-reference some data with maps on the internet and we can identify whether the information is true or not,” he says.
With so many tools, applications and social networks themselves, companies can now analyze their customers' lives much more quickly and easily.
By visiting a person's profile, you can find out, for example, whether the income they show they earn is compatible with what they declare.
“Regarding social networks, we already perform text analysis to identify risk propensity or personality type. It will show how risky or not that client is, or how impulsive or less impulsive they are. Certain types of words are associated with certain personality types. And this use of text is increasingly sophisticated in terms of credit assessment as well,” explains Lilian.
A very practical example of this is when a company that requests credit claims to have commercial representation throughout the country. The institution can, based on geolocation, compare whether the addresses provided actually exist. Or even in situations where the person claims to be in a difficult financial situation, but posts photos in expensive restaurants and frequently attending parties.
Companies are betting on this alternative analysis
When it comes to social media and credit assessment , foreign companies are leading the way in adopting new methods to analyze whether a person is likely to default on their payments. In Brazil, there are still few companies that have adopted such measures, but some are already setting an example.
As we said before, fintechs are the ones that are most committed to using new tools to assess their customers’ credit . The Philippine-based Lenddo , for example, uses big data, machine learning and social network analysis. At Banqu , the use of blockchain helps to give a financial identity to those who cannot access global markets, despite having the capacity to produce and escape poverty.
Another example comes from the United Kingdom, where the country's largest insurer, Aviva , identified 10 financial personality types to indicate which one the saver fits into.