Banks urged to use ‘alternative data’ to assess creditworthiness

“With alternative data, a more complete picture of the client is painted, thus allowing for more individuals and businesses to be assessed,” BSP governor Benjamin Diokno said.

MANILA: The Bangko Sentral ng Pilipinas (BSP) has urged banks and financial institutions to use “alternative data” such as social media information to determine the creditworthiness of individuals and companies, as part of efforts to widen the industry’s reach.

Traditionally, banks and financial institutions predict risks by using data from clients’ financial transactions, as well as information from credit bureaus, which unfortunately do not capture the data of those who remain unbanked.