Are You Searching for a Loan? Be Careful with Your LinkedIn and Facebook Accounts

Lending companies are using big data in an effort to complement traditional information that they can get through credit score and have a better understanding of the risk profile of their prospective clients, says Gaia Rubera, Professor of Marketing at Bocconi University, in a video of the #BemacsTalks series.

For instance, some companies monitor the LinkedIn accounts of the prospective clients in order to understand how easy it would be for these clients to find a new job, should they lose the one that they have while they still have to repay their debt.

Other companies ask for a temporary permission to access the Facebook accounts of the clients. They monitor their friends, they look at the pictures that they post, the places where they go on vacation, the houses where they live, the kind of jobs they have, in order to understand if the client has some wealthy friend in her network, that could step in and help repay the debt or the loan, should the client have hard times doing that.

Of course, having a wealthy friend doesn't mean that this friend would be willing to step in and help the client. So these companies are also trying to understand the strength of the tie between the friend and the client. For instance, they analyze how similar the language that the two individuals use is, how many common words they use in their conversation. The idea here is that the more similar the language, the stronger the tie between the two individuals and, hence, the greater the chance that the wealthy friend will step in and help the prospective client.

These are just some of the examples that show what kind of information lending companies can gather by mining social networks. What are the consequences of using these additional data? While the phenomenon is still very young and the jury is still out, there is some initial evidence that there is a double benefit, both for the prospective clients, because the clients embedded in better networks are able to receive lower interest rates and for the lending companies, that can have a better understanding of the risk profiles of their clients.

CLICK HERE to watch the video