Consumers holding onto their social media data
New research from Equifax has revealed that 75% of consumers are unlikely to allow financial institutions access to their social media data.
The online survey, conducted in collaboration with YouGov, found that 76% of consumers are not in favour of financial companies using the information they post on sites such as Twitter, Facebook, Instagram and LinkedIn to assess their application for a financial product. Over half (52%) said that it would actually make them angry.
In addition, 28% of respondents would be worried and 18% would be frustrated if financial institutions used social media data to assess suitability.
However, only 35% of respondents (out of 2,065 adults) would go as far as altering what they post online if it was to be used to verify their identity or spending habits.
Paul Birks, director of decision solution at Equifax, said: “While we are fast becoming social media ‘addicts’, the survey results show that people are against financial companies using social media to assess their suitability for products. This raises challenges as using this data can be a huge benefit for both companies and consumers, for example in helping fight fraud, and evaluating what people can afford to borrow.
“With fraud on the rise, companies are turning to social media as a useful tool to verify an applicant’s identity. The number of contacts and length of time an online profile has been established is a useful way to help judge whether an application is genuine or from a fraudster. A well-established, active social media presence is very hard to fake.
“If companies go down this route, they have to be transparent and educate consumers on how social media information could be used; consumers also need reassurance that, as with any personal data, privacy will be respected. Using social media information to assess an application could be particularly useful for people who don’t have a traditional borrowing history and therefore may have a ‘thin file’, such as a young person applying for their first loan. Companies have a moral and regulatory obligation to lend responsibly, and should investigate all the tools available to help ensure this happens.”