Banks Determine Creditworthiness From Calling and Location Data
The Cambridge, Massachusetts firm Cignifi is making yet another small step on behalf of the practice of demographic profiling. Marketed towards banks in developing nations where a prevalence of cash transactions challenges conventional means of assessing credit risk, Cignifi’s innovative modeling software studies the time of day, duration, and even location of a cellphone user’s calls to to determine, with supposedly remarkable accuracy, the degree of risk involved in extending a line of credit.
Cignifi … can look at usage data from consumers’ mobile phones and make predictions about who that person is and how they live … [chief executive Jonathan] Hakim says, “The way you use your phone is a proxy for your lifestyle. It’s not random. So we’re looking at things like the length of calls, the time of day, and the location you make them from. Also things like whether you top up regularly. We want to see how stable the patterns are. When you look at that, you can create these behavioral clusters that give you information about users’ appetite for new products, and their ability to repay a debt.
More traditional (and in many jurisdictions, illegal) forms of profiling disciminate against people of color, against people who have been incarcerated, or against people based on religion or sexual orientation. Cignifi is helping banks discriminate against people who, what? Stay up late, ride the bus, or hang out in parks? Guess I should give up on trying to buy that new moped in Indonesia.