Your social data is key to getting a bank loan!

dubai — Move over credit bureau. Indian banks are increasingly betting on customers’ social media accounts and mobile phone data for risk assessment before sanctioning loans.

A report in The Economic Times says officers are spending more time in reading Facebook posts, SMSs and payment data available in mobile apps to decide whether to sanction a loan, rather than relying solely on conventional methods like payment history available with the credit bureau.

The paper said new-generation banks like Kotak Mahindra, HDFC, Axis and even government

-owned State Bank of India use social media behaviour for sanctioning loans. They track data captured in Google Maps, payment to Uber cabs, or even electricity bill payment records, the paper reported.

“Credit bureaus are increasingly becoming irrelevant,” Dipak Gupta, joint managing director at Kotak Mahindra Bank, told the paper. “Traditionally, we have had 40 per cent weightage to bureaus, but because there is so much data available that weightage may be 20%.”

Kotak’s digital savings bank account allows customers to save and pay using their mobile phones. Gupta said the information that the bank collects through mobile phones is useful to make credit decisions.

“On social media, banks are at a stage where it is adding value but this co-relating will have a long way to go in yes and no situations,” Arvind Kapil, group head — unsecured, home and mortgage loans at HDFC Bank, said.

“We are working on social media but you also have to bear in mind that privacy laws will get strengthened,” he cautioned.