BSP urged banks to use “alternative data” in order to assess the creditworthiness of borrowers.
BSP — The Bangko Sentral ng Pilipinas has urged banks to use “alternative data” in order to assess the creditworthiness of borrowers.
The central bank was encouraging banks and financial institutions to make use of other sources or “alternative data” such as social media and online transactions for credit scoring.
Manila Bulletin reported that “alternative data” in performing credit scoring used digital mining or footprints and other telco data, not just the traditional banking accounts.
In a recent webinar on financial technology hosted by TransUnion Philippines and FinTech Alliance Philippines, BSP Governor Benjamin E. Diokno said that the use of “alternative data” for credit scoring was just one example of how data can be used to benefit consumers.
“We must continue to take initiative in fostering an inclusive digital financial ecosystem,” Diokno said.
READ ALSO: BSP Tells Banks To Clamp Down On Digital Vote Selling, Vote Buying
Also, the Bangko Sentral ng Pilipinas was urging financial institutions and banks to explore the use of non-traditional consumer data in order to “design, improve, and deliver financial services”.
According to the central bank, unlike traditional such as credit bureau information and bank transactional data, alternative data came in several forms including social media, utilities data, mobile data, behavioral data, geolocation data, online transactions, and browser data, among others.
The central bank said that forecasting creditworthiness was “one promising use case of alternative data” particularly for MSMEs (micro, small, and medium enterprises) and other sectors of Filipino society that have no credit history to speak of.
For more news and updates, you may feel free to visit this site more often. You may also visit Newspapers.ph via our official Facebook page and YouTube channel.