Turner Michael Perc newThe recent article in Wall Street Journal “Silicon Valley: We Don’t Trust FICO Scores” prompted our friend Michael Turner (PERC) to post the following response on LinkedIn:

Sea Change Afoot in Credit Scoring: All the pieces are in place. Huge, well-capitalized companies are sitting a massive data assets that could be powerfully predictive of credit worthiness (Amazon, Google, LinkedIn, eBay, PayPal, FaceBook). These firms, if publicly traded, have a compelling incentive to monetize their data assets. Given the current obsession with BIG DATA they are likely already hard at work on developing an entry strategy.

PERCMeanwhile, as many as 54 million Americans remain credit underserved, with an estimated 19 to 34 million Credit Invisibles. Mainstream lenders are eager to enter this market, and accurately differentiate low risk from higher risk borrowers. In short, there is a demand for new data and new methods and there also is an abundant supply. Make no mistake, this will happen. So either FICO is in denial, or they know something that Silicon Valley doesn’t.

Source:  LinkedIn