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The IMF suggests that traditional banks take into account data such as search history when granting loans

The International Monetary Fund has recently published on its website a study in which it analyzes the way in which technology and finance are influencing each other today ... and how the financial system is reacting to the emergence of fintech.

The objective of this publication has its origin in the interest of those responsible for this international institution in saving traditional banking from the threat posed to it by large technology companies, and proposes that banks take note of their strategies.

They know that Facebook, Google and Apple, through the 'big data' provided by all the platforms they control, have more and better information on bank customers than banks, and that these same platforms grant them communication channels with them capable of replacing the physical locations of traditional financial entities.

And this affects both the realm of individual clients and that of large corporate clients.

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"Innovation is driven by the variety of digital platforms [...] that have penetrated a large part of consumers' everyday lives, thus increasing their digital footprint and available data. "

"Platforms such as Amazon, Facebook or Alibaba are increasingly incorporating financial services into their ecosystems, generating new specialized providers that compete with banks in payments, asset management and the provision of financial information."

More information from users, greater financial inclusion

Thus, the report describes how the use of smartphones, online searches and social networks have helped drive financial innovation by becoming non-financial data sources (online purchases, hardware used to access the Internet, browser history, etc.) ...

... which, however, thanks to artificial intelligence, can be used as alternative (and, in some cases, more advisable) ways to calculate credit score.

This, according to the report's authors, could end up helping boost financial inclusion, as it could allow individuals and companies that are often discriminated against by traditional methodss can receive more credits from now on.

This would have repercussions in favor of sectors such as, for example, informal workers, skilled immigrants and companies located in rural areas.

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Official digital currencies

Finally, it also analyzes how the launch of cryptocurrencies driven by big technology, such as Facebook's Libra project, has influenced the debates for central banks to launch their own digital currencies, as the Japanese and the Chinese have already done, and they plan to do also in the US and the EU.

It is believed that projects like Libra could threaten the monetary sovereignty of the EU, thesis already defended recently by Christina Lagarde, president of the ECB, who defended the issuance of a 'digital euro' as a necessity to guarantee said sovereignty, as well as continuous access to money.