Typically, when providing credit, the lender’s knowledge of the borrower will be incomplete. To counteract that information asymmetry, banks often require collateral in the form of tangible assets, like real estate. But what if Big Data could solve that information asymmetry?
What would a world where data was restricted by borders look like? This week the Bank of England’s blog, Bank Underground, explored the threat that fragmentation in the global data supply chain could pose to financial services.
One item at this week’s XBRL Europe Digital Week was especially encouraging for those of us focussed on the modernisation and simplification of the XBRL standard. Fujitsu’s development team have been working on a Proof of Concept implementation for the xBRL-CSV specification. xBRL-CSV is designed to simplify handling of very large volumes of data. This […]
Central banks and national statistical offices have increasingly been looking to big data sets and analytics to provide new insights – but managing data of this magnitude requires new data platforms. This week a Bank for International Settlements (BIS) report breaks down how best to deal with big data. Novel big data sets – such […]
The Spanish bank BBVA has used big data technology to track the impact of Covid-19 on Spanish consumption – discovering a 49% average decline in consumer spending. The study looked at anonymised and aggregated data from 1.4 billion card transactions since 2019, demonstrating dramatic changes in spending habits as the crisis took hold. The data […]
This month the European Commission launched Europe’s ambitious new data strategy with a flurry of documents and two new consultations. Over the next five years the EU plans to create a single market for data that complements the common economic market ensuring that data should be able to flow across countries and sectors within the […]
In the Bank of International Settlements’ (BIS) latest podcast Bruno Tissot, Head of Statistics and Research Support at BIS, discusses how we can best use big data, the opportunities and challenges it presents, and the policy issues it creates. Tissot likes to see big data as organic data as opposed to static data: static data is collected […]
A recent European Banking Authority (EBA) report outlines key challenges relating to the increased adoption of big data and advanced analytics. Big data and advanced analytics – including machine learning – are increasingly prevalent in the banking industry, with their use only set to expand in future. Two-thirds of credit institutions surveyed by the EBA […]
We’ve heard a lot about the potential of fintech to open up access to credit by using big data and alternative data sources to assess risk – but how do these techniques actually stack up when compared to traditional credit scoring? A recent working paper from the Bank for International Settlements (BIS) looks at transaction […]
Five US Federal financial regulatory agencies have issued a joint statement outlining their thoughts on the use of alternative data in underwriting and credit analysis by banks, credit unions and financial firms. The statement, issued by the Federal Reserve Board (Federal Reserve), the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the […]