Paper Type

ERF

Abstract

The rapid emergence of risk management Fintech has led to increasing use of alternative data in personal and business financing. Yet there are significant risks and concerns resulting from using alternative data. We therefore seek to examine the differential role of alternative data in SME-focused Fintech lending. We compare the credit evaluation and fraud detection contexts and examine the circumstances under which alternative data are useful for both contexts. Our goal is to find a parsimonious set of traditional and alternative data types that can help facilitate risk management in SME-focused Fintech lending. In this short paper, we report some preliminary results and findings from the first phase of our data collection and analysis. We then discuss the potential contributions and future plans of the study.

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Aug 10th, 12:00 AM

The Differential Role of Alternative Data in SME-Focused Fintech Lending

The rapid emergence of risk management Fintech has led to increasing use of alternative data in personal and business financing. Yet there are significant risks and concerns resulting from using alternative data. We therefore seek to examine the differential role of alternative data in SME-focused Fintech lending. We compare the credit evaluation and fraud detection contexts and examine the circumstances under which alternative data are useful for both contexts. Our goal is to find a parsimonious set of traditional and alternative data types that can help facilitate risk management in SME-focused Fintech lending. In this short paper, we report some preliminary results and findings from the first phase of our data collection and analysis. We then discuss the potential contributions and future plans of the study.

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