Yes. The above quoted question is an absolute truth.
A recent study shows that in year 2019, social network users will be around 258.27 million, up from close to 168 million in 2016. The most popular social networks in India were found to be YouTube and Facebook, followed by social app WhatsApp. Facebook is estimated to reach close to 319 million users in India by 2021. The number are literally whopping. Have you ever wondered how your social credibility or social behavior on various apps and sites would help the various financial institutions know your credit worthiness? Nobody of us ever did! The smart lenders are working really smart taking help of smart phones. Let us tell you how exactly it works.
Impact of Social Presence & Big Data
Various search engines, applications and social networking sites are no doubt huge databases where our conversations are dumped and stored, all our pictures, comments, etc. are stored. Whatever you type in your search list is also saved. Imagine! So it all works on data analytics; which is further divided into sub categories like the big data, public data and the data streamlined (this is the data generated through google and different search engines) to name a few. Nothing is hidden from the developers and the team sitting at the backend. We always leave behind the data whether we use Paytm to transfer money or do any online activity. And these things are what helps in determining whether you are worthy of being granted loans or an outright rejection.
Now consider this as an instance. You use an application named LinkedIn which has information related to your professional life. And you also have a Facebook account where you have explicitly provided the LinkedIn profile link. You go to a bank and apply for the loan there.
Their form includes questions like:
- Which company do you work in?
- What is your designation?
- What is your standard salary mark?
Layers of Information on Social Platforms
The lenders can easily access information from your LinkedIn profile and bio details. Doing this achieves more than half of the lenders job of scrutinizing data and reaching a conclusion about the takers background. Doing this does more than half the lender’s part. With the information found on social sites, the lender fair idea about the applicant’s income. So he can easily estimate the range within which his affordability lies and thus whether you meet the minimum income criteria or not required for loan approval. Also, the kind of people you associate with on social platforms along with other interesting aspects of one’s character. Not only does it help in fetching character traits but also get clear indications about the lifestyle of this individual and spending patterns. The places you visit and upload pictures of and how often do you go out to similar places lets other know your way of living as well as spending. This again helps the lender know more about your various financial patterns.
What is a GPS? The Functioning
Global Positioning System helps trace your position even if it’s working on mobile. So, GPS basically helps in verifying your house address along with your office address. Thus, work becomes totally paperless and speedy. Not just this, time spent on shopping online and the total amount spent in a month on an average helps in building your credit score. Whether you’re paying your cellular data bills on time or not, again affects your credit score. If you pay your bills without a fail, it will pump up your score and being a defaulter will only negativity impact your credit score.
Also read: Can personal loans enhance your credit score?
The social or digital behavior is helping a lot in building your credit history and credit scores of the most targeted and potential customers. So now the company is saving in terms of cost, time and processing. As of now, only a handful of financial companies are using this as a parameter but the future can be well projected. Within just a decade, this criterion will be embraced by a major chunk of the financial sector (government and private). Remember, we are always getting traced and accessed online. This is the future!