On the Rise of FinTechs - Credit Scoring using Digital Footprints

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Overview: This presentation aims to analyse the information content of a digital footprint—that is, information that users leave online simply by accessing or registering on a Web site—for predicting consumer default. The research shows that even simple, easily accessible variables from a digital footprint match the information content of credit bureau scores. A digital footprint complements rather than substitutes for credit bureau information and affects access to credit and reduces default rates. The implications for financial intermediaries’ business models, access to credit for the unbanked, and the behaviour of consumers, firms, and regulators in the digital sphere will be discussed.

Speaker Bio: Tobias Berg is Professor of Finance at Frankfurt School of Finance & Management. He was previously Assistant Professor of Finance at the University of Bonn and a visiting scholar at the Stern School of Business, New York University (NYU) as well as the European Central Bank. Tobias Berg works in the area of financial intermediation and corporate finance and focuses on risk management, bank regulation, and real effects of financial intermediation. His research was published in leading international journals such as the Journal of Finance, Review of Financial Studies, or Journal of Financial and Quantitative Analysis and he has presented at conferences such as the AFA, WFA, and EFA. He has won several best paper awards for his work, was ranked among the Top 10 economists in Germany in 2019, and has received the Review of Financial Studies Distinguished Referee Award in 2019. He teaches financial intermediation, corporate finance, and asset pricing and has won a best teaching award for a master course in corporate finance.