TY  - UNPD
A1  - Nam, Rachel J.
T1  - Open banking and customer data sharing: implications for fintech borrowers
T2  - SAFE working paper ; No. 364
N2  - With open banking, consumers take greater control over their own financial data and share it at their discretion. Using a rich set of loan application data from the largest German FinTech lender in consumer credit, this paper studies what characterizes borrowers who share data and assesses its impact on loan application outcomes. I show that riskier borrowers share data more readily, which subsequently leads to an increase in the probability of loan approval and a reduction in interest rates. The effects hold across all credit risk profiles but are the most pronounced for borrowers with lower credit scores (a higher increase in loan approval rate) and higher credit scores (a larger reduction in interest rate). I also find that standard variables used in credit scoring explain substantially less variation in loan application outcomes when customers share data. Overall, these findings suggest that open banking improves financial inclusion, and also provide policy implications for regulators engaged in the adoption or extension of open banking policies.
T3  - SAFE working paper - 364 
KW  - Open banking
KW  - FinTech
KW  - Marketplace lending
KW  - P2P lending
KW  - Big data
KW  - Customer data sharing
KW  - Data access
KW  - Data portability
KW  - Digital footprints
Y1  - 2022
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/69106
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-691063
UR  - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4278803
N1  - JEL-Klassifikation: G Financial Economics / G5 Household Finance / G50 General
IS  - First draft: Sept 23, 2022
PB  - SAFE
CY  - Frankfurt am Main
ER  -