Monday, August 25, 2014

Let's hook our private lives up to the giant omnipotent banking machine

What could possibly go wrong?
It’s only natural that the less fortunate, under the burden of austerity, are turning their kitchens into restaurants, their cars into taxis, and their personal data into financial assets. What else can they do? For Silicon Valley, this is a triumph of entrepreneurship — a spontaneous technological development, unrelated to the financial crisis. But it is only as entrepreneurial as those who are driven — by the need to pay rent — into prostitution or selling their body parts. Governments might resist this tide but they have budgets to balance: Uber and Airbnb will eventually be allowed to exploit this “gold mine” as they please, boosting tax revenues and helping citizens make ends meet.

The “sharing economy” won’t supplant the debt economy; they will coexist. The increased liquidity of data, combined with more and better tools of analysis, already allows banks to tap the techniques of Big Data to extend credit to “unbankables” while identifying and excluding the true deviants. This would only raise anxiety over debt. Start-ups like ZestFinance, which studies 70,000 data points — including how you type and how you use your phone — already help banks decide whether online applicants are worthy of a loan. A scheme pioneered in Colombia by Lenddo, another tech-savvy lending start-up, links the approval of credit cards to applicants’ activity on social media, so now their every click can affect their suitability for credit — a point not lost on Douglas Merrill, the co-founder of ZestFinance, who says that “all data is credit data”. Well, if all data is credit data, then all life — captured by digital sensors in the world around us — beats to the rhythms of debt.

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