Tobias Berg, Valentin Burg, Ana Gombović, Manju Puri, 24 August 2018

Digitisation is one of the major trends of our time, with all of us constantly leaving footprints in the digital sphere. This column evaluates the value of digital footprints for credit scoring and finds that easily accessible variables from such footprints have a predictive power that equals or exceeds that of traditional credit bureau scores. Analysing borrowers’ digital behaviour may present an opportunity to boost financial inclusion in developing countries, where the inability of the unbanked population to participate in financial services is often caused by a lack of information infrastructure.

Dennis Snower, 22 August 2018

Digital identity management is currently undertaken by central identity providers, with users providing their data free to digital networks that own their digital identities. If users leave their digital networks, they must leave all their digital possessions, including their digital identities, behind. This system is analogous to slavery. It is neither efficient nor equitable. Users have no assurance that the value of the free data they provide bears any relation to the value of the free services they receive. The digital networks have overwhelming market power relative to their users. This column argues for reform in the form of a Digital Freedom Pass, – the digital equivalent of a wallet containing verified pieces of an individual’s digital identity. The person can then choose which identification to share, with whom, and when, allowing emancipation from our current digital slavery. 


CEPR Policy Research