They’re not even trying to hide it anymore.
IMF researchers Arnoud Boot, Peter Hoffmann, Luc Laeven, and Lev Ratnovski have informed the globe that we are shortly to be warmly embraced by social credit scoring, as already enjoyed by the Chinese.
Specifically, in a blog published on on the IMF’s website they called for credit-worthiness, and ultimately banking, to be tied to “the type of browser and hardware used to access the internet [a person uses, and their] history of online searches and purchases.”
You can read the whole thing for yourself here, but in summary the blog lays out two forms of financial innovation currently underway:
— “new tools to collect and analyse data on customers,”
— and “new approaches to customer relationships and the distribution of financial products.”
“Huh?” I hear you mutter. Let me explain.
The first relates to the type of data financial institutions may use in the future to access, “for example,” credit trustworthiness.
“Credit scoring using so-called hard information (income, employment time, assets and debts) is nothing new,” the researchers wrote. But it seems this method has problems. One of those problems, they said, is that it blocks access to credit for people who might need it but are unable to prove their credit-trustworthiness.
“Certain kinds of people, like new entrepreneurs, innovators and many informal workers might not have enough hard data available,” they wrote; rural households and businesses were also later mentioned in the same bracket.
If you don’t think at all about what’s being said, this sounds vaguely plausible. Surely we want entrepreneurs to access credit? But hang on, what is an informal worker, and why would a financial house worth their salt want to offer them credit? Why are businesses and households in rural areas any less likely to prove their credit worthiness than those in cities? Do people in the countryside not have bank statements and assets and documents proving legal ownership?
In fact, there’s a pattern emerging here. About two weeks ago, the British government put out a press release titled: Government sets out new plans to help build trust in use of digital identities, in which they explained:
“Digital identity products allow people to prove who they are, where they live or how old they are. They are set to revolutionise transactions such as buying a house, when people are often required to prove their identity multiple times to a bank, conveyancer or estate agent, and buying age-restricted goods online or in person.
“Organisations will be required to publish a yearly report explaining which demographics have been, or are likely to have been, excluded from their service and why. The move will help make firms aware if there are inclusivity problems in their products while also boosting transparency.
“Economists have estimated the cost of manual offline identity proofing could be as high as £3.3 billion per year. The new plans will not only make people’s lives easier but also give a boost to the country’s £149 billion digital economy by creating new opportunities for innovation, enabling smoother, cheaper and more secure online transactions, and saving businesses time and money.
“Digital Infrastructure Minister Matt Warman said: “Our aim is to help people confidently verify themselves while safeguarding their privacy so we can build back better and fairer from the pandemic.”
You see? The old way of doing things was bad. It left people behind. That’s not good for them — or the economy. And what’s good for the economy is good for all of us in our fairer, better, post-pandemic utopia.
So if credit ratings are no longer to be determined by things like bank balance, income, debt history — you know, factors that actually have a bearing on credit-trustworthiness — what will they be based on?
Well, “various nonfinancial data: the type of browser and hardware used to access the internet, the history of online searches and purchases,” the IMF researchers chirped.
Really? ‘Yep,’ they nodded enthusiastically. “Recent research documents that, once powered by artificial intelligence and machine learning, these alternative data sources are often superior than traditional credit assessment methods.” How reassuring.
What this means in plain English is this: the next time you want to purchase a house and apply for a mortgage — assuming you’ve jumped through the digital passport hoop, of course — rather than being asked for proof of income and how much you intend to lay down as a deposit, i.e., questions that have a direct bearing on your ability to pay that mortgage, you’ll instead be asked why your latest phone handset is a Light Phone when your last three were Androids, and why last month you stopped reading the Telegraph and instead switched to the Epoch Times. Is it because you’re a Nazi? Because we have a policy of not offering credit to Nazis. For inclusivity reasons, you understand. Zero tolerance for intolerance. Government rules.
But wait! There is more good news. You won’t be having this conversation in a bank, because, according to our friendly IMF researchers, banks are so last century. Oh no, you’ll be having it with a Facebook fact-checker instead.
“Platforms like Amazon, Facebook or Alibaba incorporate more and more financial services into their ecosystems, enabling the rise of new specialized providers that compete with banks in payments, asset management, and financial information provision,” the researchers trilled.
“As new players make banks less relevant for the financial system, central banks may need to adjust their monetary policy implementation toolbox, potentially allowing nonbanks access to liquidity lines and incorporating them in their operations.”
This translates as: the banking regulators will soon issue banking licenses to Facebook, Amazon and Alibaba, three of the biggest winners from the lock-downs implemented by governments over the last year as consumers were driven out of small business to shop online.
But it’s for your own good.
“The shift from in-person bank branch visits to remote, online communication generally improves customer convenience and makes financial intermediation more cost-efficient,” the researchers purred. “It also boosts geographic competition among banks, which can now service more distant customers.” (Them pesky rurals again).
So there we have it, our new normal. Gone are the days in which a hard-working, law abiding citizen could simply earn a wage, bank that wage in a high street bank and draw down his or her capital to spend it in the local economy, supporting others’ businesses.
No, in our brave new world you will work but the wages will be credited to your Facebook account. Providing you have proven your ‘credit worthiness’ by posting at least one video this week of yourself enthusiastically banging pots for the NHS, have ‘liked’ and ‘shared’ at least three posts from a government source, and publicly denounced one Covid denier, you will be granted access to your FBCoins to order food from Amazon home and clothes from Alibaba.
Feel like kicking back and watching a film this evening? That’s just fine, Amazon Prime will grant oyou access – providing you first watch 30 minutes of Hancock and Whitty reading the names of this week’s Covid-deceased. And don’t think about looking away, your Smart TV will self-pause as soon as you do.
All for your own good, you understand.