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IMF wants to tie web history to credit score.. WHY WE NEED BITCOIN

(Photo by SAUL LOEB/AFP via Getty Images) A group of researchers has published a blog post at the International Monetary Fund’s website in which they call for a significant shift in how credit scores are assessed. Instead of being based on traditional metrics, the group believes banks should begin incorporating additional information, including your browser history.

The rise of fintech services and cryptocurrencies have changed modern banking in a number of ways, and banks face an increasing number of challenges as various third-party payment processors interpose themselves between financial institutions and their traditional customers. The credit scoring systems used broadly in the US and Europe are based on so-called “hard” information — bill payments, pay stubs, and how much of your current credit limit you are tapping.

The researchers point out that so-called “hard” credit scores have two significant problems. First, banks tend to reduce credit availability during a downturn, which is when people most need help. Second, it can be difficult for companies and individuals without credit histories to begin creating one. There’s a bit of a catch-22 in the system, in that what you need to persuade an institution to loan you money is a credit history you don’t have because no one will loan you money.

Having identified two flaws in the existing system, the authors write:

The rise of the internet permits the use of new types of nonfinancial customer data, such as browsing histories and online shopping behavior of individuals, or customer ratings for online vendors. The literature suggests that such non-financial data are valuable for financial decision making. Berg et al. (201...
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