BIIA has followed this conversation on LinkedIn which we believe is highly relevant because credit bureaus are already mining non-traditional data such as rental performance data, utility payments etc. 

Our editor concurs with the respondents that information gathered from social networks is hardly useful because it has been placed there by data subjects and has not been verified. 

Artak Robert Melkonyan UAE wrote:  Any of the operational credit bureaus start doing data mining / extraction from social networks sites to enrich data? What data could be used and what are the legal implications of that?

Only two-three years ago some loan officers in the banks start occasionally using Facebook to get data on their clients. Now banks quite seriously look at using information from social networks for consumer credit risk evaluation. Hence it seems to be the next phase for technological development of consumer credit bureaus. It would be interesting to know if any of the operational credit bureaus start doing data mining / extraction from social networks sites to enrich their data. What data could be used and what are the legal implications of that?

Karthigeyan Srinivasan •  Establishing credit bureau in Brunei Darussalam

At the best, the data that a Credit bureau can get from social networks about a subject are only demographical information such as name, date of birth, contact details and sometimes employment details and nothing much about ‘Credit’ information per se.

Also, the demographical details couldn’t be depended upon for that it will not be accurate or complete; they were not verfied; there is no control on its frequent updates.

But having said that, the social network can be advantageously used by Credit Bureau for tracing them. If the bureau provides verfication such as to trace the customer who has defaulted, then the social network details can be used for.

As far as legal constraints are concerned, the only aspect that comes into place is privacy of credit subjects. However this is overcome by the fact that the information can be collected only if they are marked as public.

Artur Putkowski • International Credit Bureau and Risk Management Executive located in Frankfurt

I fully agree with Karthigeyan. Social networks can be only limited source of information, demographic, also with limited reliability (unverified). But such information is very interesting for recruitment companies and one’s potential employer. So one should be very careful what she/he posts and writes on Facebook, Twitter, etc. It could easily backfire.

Joachim C Bartels, Managing Director BIIA Hong Kong

BIIA has followed this conversation on LinkedIn which we believe is highly relevant because credit bureaus are already mining non-traditional data such as rental performance data, utility payments etc.

We concur with the respondents that information gathered from social networks is hardly useful because it has been placed there by data subjects and has not been verified. 

Information gathered from social networks is hardly useful because it has been placed there by data subjects and has not been verified.  I venture to say that the majority of information placed on the web is subject to obfuscation and therefore highly suspect.

Instead credit bureaus should consider adding data from non-traditional data such as rental performance data, utility payments etc.

Robin Watson Director at Central Bureau Solutions UK

Very sensitive subject and is much dependent on what part of the world the Bureau is based. For example in the Middle East this would not be acceptable and the public would soon discredit the Bureau. Also the accuracy of the data has to be questioned, anyone could give false information which may conflict with the data already uploaded from a more reliable source e.g. from a Civil Authority interface which does not rely on social risks such as relative changing data. Also as Data must not be transfered across borders with the customer consent this would also put into doubt the integrity of the Bureau.

Joachim C Bartels, Managing Director BIIA Hong Kong

Your last sentence indicates the current trend by Middle Eastern and Asian Authorities to restrict data transfer across borders.   This is an ill-conceived restriction which limits the mobility of individuals and businesses. 

In its recent publication:  Five Principles for Credit Reporting the World Bank recommend in its principle five that Cross-border data transfers should be facilitated, provided that adequate requirements are in place. 

Two key reasons:  Enhance access to credit for individuals and businesses which migrate across borders:  Example:  The European Directive on Consumer Credit (Directive 2008/48/EC) aiming at the integration of consumer markets in Europe, contains provisions facilitating the exchange of information regarding credit payment history of borrowers/consumers between different countries in the European Union. 

The second reason is that there are markets which are too small to operate a credit bureau cost-effectively.  A multi-country credit bureau concept should therefore be facilitated.   The Business Information Industry Association Asia Pacific – Middle East (BIIA) participated in the World Bank task force which developed the five principles.  You can find the document on: https://2018.biia.com/world-bank-issues-general-principles-on-credit-reporting

Source:  LinkedIn Group Credit Bureau & Consumer Credit Risk Management