Scenario 1: The credit gap keeps widening
Scenario assumption: In 2030, due to the slow pace of innovation in the credit investigation industry, the high cost of credit investigation, and the economic downturn, the effectiveness of loan decisions has not been substantially improved, resulting in a widening credit gap. Because of concerns about data security and transparency, a growing number of consumers have little or no information from credit bureaus, and they are struggling to obtain credit based on their own risk criteria. In this context, the credit reporting market will show the following characteristics in the future:
There are great difficulties in obtaining consumer data. First, data security problems such as data leakage and illegal collection lead people to distrust the data collection and processing behavior of credit bureaus. Second, because consumers do not cooperate with the provision and are not optimistic about credit institutions, alternative data application prospects are not good.
Cost and innovation problems hinder the development of credit investigation market. First, the market incentive measures taken by some credit investigation institutions to attract consumers and the monopoly behavior of a few large credit investigation institutions have led to high credit investigation costs. Second, the innovation and development of the credit investigation industry is hindered. Due to consumer doubts about the fairness of algorithms in systems such as advanced analytics (such as machine learning and artificial intelligence), its application in risk decision making has been limited.
The contradiction between supply and demand of credit restricts the development of credit market. First, it is difficult for people with little or no credit history to obtain credit support. The second is low demand for credit due to the economic downturn and lack of consumer confidence.
Scenario 2: Consumer-centric credit
Scenario assumption: Consumers recognize the value and risk of sharing data and have the right to choose what data is shared and with whom. In the credit market, where consumer consent data is widely used for credit decisions, credit bureaus compete fiercely to build strong brands, maintain consumer trust, and articulate the benefits of shared data to consumers. Financial institutions have more flexible information about lending decisions, and consumers can get credit better or on more favorable terms. In this context, the credit reporting market will show the following characteristics in the future:
Consumer awareness of data rights has increased, forcing credit bureaus to comply with data protection regulations. Consumers are increasingly aware of data rights and risk concepts, hoping to reduce the number of data authorization objects as much as possible. With the continuous improvement of the regulatory system, regulators have also increased law enforcement efforts to protect the legitimate rights and interests of consumer data from infringement. In order to meet consumer wishes and regulatory requirements, credit bureaus strengthen data protection regulatory compliance.
Credit institutions and credit bureaus strive to gain consumer trust. There is intense competition among credit bureaus to develop more powerful user interfaces and expand their business from credit markets to insurance and leasing. The second is to invest heavily in data security in response to consumer concerns about data protection and data ownership.
Consumers are more willing to share data. As credit institutions and credit bureaus increase their attention to information security and information protection efforts, consumers’ willingness to actively share data has become stronger. However, there are still some consumers who feel compelled to share information and refuse to provide additional data because they do not agree with this compulsion, thus restricting their access to loans (such as fewer options for credit products, or not being able to obtain loans on better terms).
Post time: May-27-2024