Will the development of data processing technology accumulated in the Big Data banking database systems improve the credit risk management process or will it contribute to the development of Shadow Banking and the use of unethical practices for the surveillance of potential borrowers?
Large commercial banks generate high financial surpluses allowing for the implementation of modern integrated teleinformatic internet banking systems, Business Intelligence data analysis systems, data processing platforms in Big Data database systems, etc.
There were already situations of unethical use of modern ICT solutions, analysis of comments on social media portals, during which the bank verified the customer's data entered into the loan application by also scanning information that the potential borrower types in social media portals.
This informal verification took place without the knowledge of a potential borrower and could then be the basis for suing the bank.
However, the bank's client is not always aware of the fact that it can be invigilated in such a way by the public trust institutions that the bank should be.
Of course, these types of cases, which we know from the media is supposedly a margin of entire banking, which can be one of the categories of a new type of unethical practices typical of the so-called Shadow Banking.
However, only part of this type of information gets to the media.
Maybe this is just so-called "the tip of the iceberg" of this problem.
The situation is similar in the situation of cybercriminals' attack on bank IT systems or electronic banking platforms.
If it is possible to keep this type of events secret, then customers do not find out about it.
This is because media only receive information about some of these types of events.
Does any of you conduct research in this area?
If so, I invite you to cooperation.
I am asking for comments
Will the development of data processing technology of Big Data banking systems improve the credit risk management process or, however, ...?
If so, I invite you to cooperation.
I am asking for comments
No. Past behavior cannot accurately predict future outcomes. There may be events which may not be modeled but significantly impact debt paying capacity of an individual. Nissam Taleb calls such events as Black Swans.
The issues of the use of information contained in Big Data database systems for the purposes of conducting Business Intelligence analyzes are described in the publications:
https://www.researchgate.net/publication/323244120_The_Big_Data_technologies_as_an_important_factor_of_electronic_data_processing_and_the_development_of_computerized_analytical_platforms_Business_Intelligence
https://www.researchgate.net/publication/327035102_The_Technological_Solutions_Big_Data_and_the_Importance_of_Business_Analysis_According_to_the_Business_Intelligence_Formula
I invite you to discussion and cooperation. Greetings
Based on my expertise, yes, it will lower the traditional risk, such as the bad credit expansion. The is the aim we keep improving data technology. On the other hand, new risk generates from the new innovation.
I just published a book chapter “The Dark Side of Big Data: Personal Privacy, Data Security and Price Discrimination” which discusses about the data mining and abuse. According to your statement, I think the process of banking system is "Credit Discrimination" to their potential clients.
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