The future of scoring (as in credit scoring) has been a recurring theme in meetings, discussions and not a few workshops we’ve been in this past year. The old school, simple credit score based a history of regular repayment of loans and other consumer credit products has come under pressure from two directions in recent years: the desire among financial institutions to offer debt as a product to tens of millions of new middle class consumers, and the emergence of dozens, if not hundreds of new behavioral data sources thanks to technologies such as the Web, smartphones and the IoT.
Banks and even the big credit agencies in the West have been slow to recognize the shift to new scoring constructs, while Silicon Valley—and Chinese tech companies—have raced ahead to try and establish new ways to attach risk metrics to people. In doing so, as much “innovation” being thrown at creative redefinitions of risk as at legit assessments of financial creditworthiness. Social graphs, physical behavior, emotional response, favored driving routes, reading choices, vacation habits, gene maps, stress patterns in recorded call center interactions, and just about any other data stream that someone can attempt to correlate to someone’s definition of risk in some way are being fracked to find the killer metric.
Many people today perform for the system, attempting to make themselves legible to financial systems in particular. Getting a credit card when you’re young and paying the balance regularly to establish credit. Going to the same church as the bank manager. These are the old fashioned, but still relevant, ways of doing it. Watching which metro stations you travel to, carefully pruning your Facebook connections, being meticulous about what brands are visible in your Instagram pics, editing your searches. These are shifts toward the New Legibility that are already occurring at the edges, driven by FOLO, “Fear of Losing Out.” What will the next phase of the New Legibility entail? Optimizing your informal conversation? Bending your meeting schedule to only touch certain airports at certain times? Developing burner personalities?
These are the types of speculative behaviors we’ve spent a lot of time exploring in the past year, in part because it’s already happening to us as individuals (I wrote “On Being a Data Puppet
” last autumn to explore an aspect of this). Something tells me there’s much more of this ahead.