WORKING PAPER SERIES
On the Rise of FinTechs: Credit Scoring Using Digital
Footprints
Tobias Berg
Frankfurt School of Finance & Management
Valentin Burg
Humboldt University Berlin
Ana Gombović
Frankfurt School of Finance & Management
Manju Puri
Duke University
Federal Deposit Insurance Corporation
National Bureau of Economic Research
July 2018
Published in The Review of Financial Studies 33, no. 7 (2020): 2845-2897. Available online.
FDIC CFR WP 2018-04
fdic.gov/cfr
The Center for Financial Research (CFR) Working Paper Series allows CFR staff and their coauthors to circulate
preliminary research findings to stimulate discussion and critical comment. Views and opinions expressed in CFR Working
Papers reflect those of the authors and do not necessarily reflect those of the FDIC or the United States. Comments and
suggestions are welcome and should be directed to the authors. References should cite this research as a “FDIC CFR
Working Paper” and should note that findings and conclusions in working papers may be preliminary and subject to
revision.
On the Rise of FinTechs: Credit Scoring Using Digital
Footprints
Tobias Berg
Frankfurt School of Finance & Management
Valentin Burg
Humboldt University Berlin
Ana Gombović
Frankfurt School of Finance & Management
Manju Puri
Duke University
Federal Deposit Insurance Corporation
National Bureau of Economic Research
July 2018
Published in The Review of Financial Studies 33, no. 7 (2020): 2845-2897. Available online.
FDIC CFR WP 2018-04
fdic.gov/cfr
The Center for Financial Research (CFR) Working Paper Series allows CFR staff and their coauthors to circulate
preliminary research findings to stimulate discussion and critical comment. Views and opinions expressed in CFR Working
Papers reflect those of the authors and do not necessarily reflect those of the FDIC or the United States. Comments and
suggestions are welcome and should be directed to the authors. References should cite this research as a “FDIC CFR
Working Paper” and should note that findings and conclusions in working papers may be preliminary and subject to
revision.
1
On the Rise of FinTechs – Credit Scoring using Digital Footprints
Tobias Berg†, Valentin Burg‡, Ana Gombović+, Manju Puri*
July 2018
Abstract
We analyze the information content of the digital footprint – information that people leave online
simply by accessing or registering on a website – for predicting consumer default. Using more
than 250,000 observations, we show that even simple, easily accessible variables from the digital
footprint equal or exceed the information content of credit bureau scores. Furthermore, the
discriminatory power for unscorable customers is very similar to that of scorable customers. Our
results have potentially wide implications for financial intermediaries’ business models, for
access to credit for the unbanked, and for the behavior of consumers, firms, and regulators in the
digital sphere.
We wish to thank Frank Ecker, Falko Fecht, Christine Laudenbach, Laurence van Lent, Kelly Shue
(discussant), Sascha Steffen, as well as participants of the 2018 RFS FinTech Conference, the 2018 Swiss
Winter Conference on Financial Intermediation, and research seminars at Duke University, FDIC, and
Frankfurt School of Finance & Management for valuable comments and suggestions. This work was
supported by a grant from FIRM (Frankfurt Institute for Risk Management and Regulation).
† Frankfurt School of Finance & Management, Email: t.berg@fs.de. Phone: +49 69 154008 515.
‡ Humboldt University Berlin, valentin.burg@gmail.com,
+ Frankfurt School of Finance & Management, Email: a.gombovic@fs.de. Phone: +49 69 154008 830.
* Duke University, FDIC, and NBER. Email: mpuri@duke.edu. Tel: (919) 660-7657.
On the Rise of FinTechs – Credit Scoring using Digital Footprints
Tobias Berg†, Valentin Burg‡, Ana Gombović+, Manju Puri*
July 2018
Abstract
We analyze the information content of the digital footprint – information that people leave online
simply by accessing or registering on a website – for predicting consumer default. Using more
than 250,000 observations, we show that even simple, easily accessible variables from the digital
footprint equal or exceed the information content of credit bureau scores. Furthermore, the
discriminatory power for unscorable customers is very similar to that of scorable customers. Our
results have potentially wide implications for financial intermediaries’ business models, for
access to credit for the unbanked, and for the behavior of consumers, firms, and regulators in the
digital sphere.
We wish to thank Frank Ecker, Falko Fecht, Christine Laudenbach, Laurence van Lent, Kelly Shue
(discussant), Sascha Steffen, as well as participants of the 2018 RFS FinTech Conference, the 2018 Swiss
Winter Conference on Financial Intermediation, and research seminars at Duke University, FDIC, and
Frankfurt School of Finance & Management for valuable comments and suggestions. This work was
supported by a grant from FIRM (Frankfurt Institute for Risk Management and Regulation).
† Frankfurt School of Finance & Management, Email: t.berg@fs.de. Phone: +49 69 154008 515.
‡ Humboldt University Berlin, valentin.burg@gmail.com,
+ Frankfurt School of Finance & Management, Email: a.gombovic@fs.de. Phone: +49 69 154008 830.
* Duke University, FDIC, and NBER. Email: mpuri@duke.edu. Tel: (919) 660-7657.