Although Facebook is not the first thing you think about when it comes to getting a consumer credit, know that today it has become a tool in itself for many organizations. Indeed, some online credit institutions have specialized in consumer credit via social networks. These institutions rely solely on a study of the public information available on the profile of each to determine the solvency of a credit application. This approach is very different from that of traditional organizations which, to assess the solvency of an applicant, rely on tangible data such as income, credit history, loan amount and monthly payments.
How it works?
In 2015, Facebook filed a patent to help banks report on an applicant’s repayment capacity based on information available on the site. Thus, when an online credit application is made, the financial institution can study all the information that has been made available to it regarding the internet use of the applicant. This may include the following information:
- The time of the request (a day request will generate more confidence than a night request)
- The identity of the person on social networks (use of a false name, transparency of information, etc.)
- The number of Facebook friends and the quality of their profile (the more the applicant counts his family member among his friend list, the more his profile will be safe)
- The applicant’s LinkedIn profile and job description (this allows for a rough assessment of the sustainability of the current position and the amount of salary)
- The frequency of his emails and the time of the sendings (the nocturnal connections are not a pledge of confidence, on the contrary)
- Login history (including searches on financial sites)
- Time spent on the internet
- Buying habits
- Payment of bills
- The spelling of the person
This solution works because it allows to attack a new angle on the credit market.
This information may be interpreted differently depending on the country from which the request originated.For example, in Europe, banks will be interested in the “quality” of Facebook friends of a profile while in Africa it is the amount of Facebook friends that will import.
So far, traditional banks do not favor all publics in the same way because, for example, because of their lack of professional activity or their recent arrival on the labor market, young people can not attest to a sufficient income. to be legitimate to a credit acceptance. Online credits via social networks are aimed at the under-35 public, which is in reality a public composed of many creditworthy people with no credit history. This audience is all the easier to reach in this context since it is very present on social networks.
Credit 2.0, soon in France?
Credit via social networks, present today in emerging countries, is slowly starting to nest in the United States and Europe. However, this is not yet a hot topic in France. The French culture, which wants to be very Cartesian, will prefer that credits are granted based on data directly related to the incomes and the expenses of the people. Especially since the confidentiality of the data is a debate mediatized in France, and that the use of these remains very watched. Thus, it will be necessary to wait a few years before seeing this credit solution penetrate the French market.
On the other hand, it is not because credits via social networks do not exist in France that the banks have not put themselves on the page. It should be noted that the Bank Postale offers its customers to add their financial advisor among their list of Facebook friends or that the BPCE group will soon propose the possibility of making a transfer through a simple Tweet.