Social scoring for corporate customers was previously unimaginable but will become reality faster than you think. It is still not the dominant or decisive factor but will become increasingly more important.
We all know that innovative fintech startups have been applying social scoring for private individuals for some years. Smart micro lending providers for example completely changed their methodology and the way business is made. They don’t care about personal incomes, existing credit lines, cost of living or assets owned anymore. They only ask for access Facebook, Linkedin or Twitter profile of the prospect. Data is gathered within milliseconds, scoring runs fully automated and credit will be granted in less than 5 minutes.
Not just social network is used to specify financial risk profile of the customers but big data technology expands data models used for scoring. A bank for example identified divorces as one of the most important factor predicting non performing mortgage loans. In case of divorce the parties often can not agree how to share property and this leads many times to divorces. To reduce this risk, the bank filtered bankcard payments of clients for hotel rooms within 50 km distance of their home. Hiring a hotel room so close to home, this must be something suspicious, right? Finally, this information was included in the scoring and monitoring model. So ladies and gentleman, don’t cheat on your partner! Or, pay cash… 😉
Why not apply same or similar information sources for corporate scoring? In HoReCa sector (Hotels, Restaurants, Café) for instance hotels are rated in booking.com representing their quality and guest’s satisfaction. Restaurants are valuated in TripAdvisor. Thus as subjective judgement will become increasingly relevant and for the suppliers probably even more important than raw financial data. Social rating is available and easily accessible, nothing can stop you to start using them.