The article is about a post on the IMF's blog by Arnoud Boot, Peter Hoffmann, Luc Laeven, Lev Ratnovski [1], which itself is basically just summarizing a more detailed working paper by the same authors [2].<p>The working paper doesn't really contain any original research (at least on this topic); they cite a single paper by Tobias Berg, Valentin Burg, Ana Gombović, Manju Puri [3]. The IMF working paper/blog post concludes, on the basis of this paper, that a system "powered by artificial intelligence and machine learning" (ugh) can improve credit assessments using features such as "the type of browser and hardware used to access the internet".<p>I feel kind of depressed that this needs to be said, but...<p>1. There is no causal link between user-agent and loan repayment.<p>2. Attaching high-value signals such as credit scores to such easily spoofed data as user-agent and browsing history has some amazingly obvious problems that are never mentioned.<p>The level of technological and statistical incompetence on display here is rather astounding, and it's difficult for me to take any of this seriously even before the ethical questions begin.<p>This is part of an ongoing trend I've noticed: the quality of human capital in financial services seems to be in rapid decline. The cream of the crop was scraped off by huge tech companies on the industry side. On the academic side, all the top students are choosing CS PhD programs instead of econ/finance and top-tier faculty are leaving core econ/business/finance/etc. departments for specialized institutes/departments. And even within finance, already degraded, the under-60 talent that does remain isn't doing stuff like loan origination or credit risk assessment for obvious reasons.<p>I think it's time to start strictly regulating things like credit scores. If not for reasons of privacy/equality, at least merely because the entire industry seems to be incompetent and getting worse.<p>--<p>[1] <a href="https://blogs.imf.org/2020/12/17/what-is-really-new-in-fintech/" rel="nofollow">https://blogs.imf.org/2020/12/17/what-is-really-new-in-finte...</a><p>[2] <a href="https://www.imf.org/en/Publications/WP/Issues/2020/08/07/Financial-Intermediation-and-Technology-Whats-Old-Whats-New-49624" rel="nofollow">https://www.imf.org/en/Publications/WP/Issues/2020/08/07/Fin...</a><p>[3] <a href="https://academic.oup.com/rfs/article/33/7/2845/5568311" rel="nofollow">https://academic.oup.com/rfs/article/33/7/2845/5568311</a>