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Social Media Profiling
Leverage social media profiling to assess solvency, reduce fraud, and optimize user experience by analyzing borrowers' online activity.
Leverage social media profiling to assess solvency, reduce fraud, and optimize user experience by analyzing borrowers' online activity.
Nearly every internet user has a registered social media account. According to statistics, the number of consumers actively using platforms like Facebook or Instagram exceeds 5.2 billion.
Most of the data posted on social media is publicly available. This means it can be legally used to create social media profiles for the majority of the world's population.
It is the process of collecting and analyzing data about a user's activity on social networks to create a detailed profile.
Such information can be used in various fields — marketing, commerce, science, and even law enforcement.
Social media profiling is also relevant for financial institutions. It helps them optimize the lending process by improving the solvency assessment of potential borrowers.
In the context of lending, this process often involves a social account search based on the borrower’s phone number and email address. These methods of obtaining alternative consumer data are known as phone lookup and email lookup.
The process of enriching a lender’s scoring models with data on an applicant's online activity proceeds as follows:
As a result of searching for social media profiles, various information can be obtained:
1. Personal details of the potential borrower, which can later be compared with the data provided in the loan application.
2. Profile photo. Avatars are compared with each other and with the selfie submitted in the application (if applicable). If it is proven that the photos depict different individuals, the borrower will be assigned a high-risk level. This technology is known as Face Match.
This method is highly effective for identity verification for credit scoring.
3. Educational and employment details, often available on professional social networks like LinkedIn.
4. Borrower’s location. The lender can compare location tags left on the profile with the address provided in the loan application.
5. Public interactions. This includes analyzing posted content, participation in events, comments, reactions to posts, and more.
All of this allows for a comprehensive understanding of the applicant's behavioral patterns, habits, and even financial situation.
Using social media profiling in credit organizations delivers the following benefits:
1. Reducing the number of loans issued through fraudulent means. Recent studies have shown that the average user engages with more than 6 social networks monthly.
Accordingly, if phone and email lookup prove unfruitful, fraud may be suspected.
2. Improving the efficiency of credit risk management. By obtaining a comprehensive picture of the borrower’s solvency, the lender can make more rational decisions regarding loan applications.
As a result, the credit organization can identify reliable borrowers among those who do not have a traditional credit history.
Additionally, by analyzing the user’s activity on social media, it is much easier to identify a potential defaulter.
3. Optimizing the user experience. When a potential borrower submits a loan application, social media profiling allows for real-time verification of their account. So, the decision on the application can be made very quickly.
There are two approaches to collecting data from consumer social media profiles: manual and automated.
Let’s consider a manual data search using Facebook as an example:
This example demonstrates the main drawback of manual search – insufficient accuracy with a limited set of input data.
Among other disadvantages of this approach are low speed and mandatory registration on each platform where the social media profile search will be conducted.
An alternative to manual search is automated social media profiling using specialized tools – for example, RiskSeal.
It has a clear advantage over manual search due to the following benefits:
High data quality
Social media profiling is widely used by lenders for objective solvency assessment of potential borrowers. This method helps reduce fraud cases, enhances risk management efficiency, and improves the user experience.
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