By Fergus Lemon, PWC

A minute is not a very long time, sixty seconds fly by; we don’t get much done in a minute. Or do we?

An infographic published by DOMO in 2014 – Data Never Sleeps 2.0 – revealed some mind boggling stats about how much data we share online every minute. For example:

  • Google receives over 4 million search queries;
  • Facebook users share nearly 2.5 million pieces of content;
  • Twitter users tweet 277,000 times; and
  • 72 hours of new video are uploaded to YouTube.

We now have access to more data on individuals and businesses than ever before and when this data is processed, structured and analysed it can be very useful for making decisions. In the context of finance, the ability to make better decisions about an individual or business’ credit risk is clearly beneficial for all parties concerned.

Some of the alternative finance platforms have embraced this and are now supplementing the traditional anti-money laundering (AML) and know your customer (KYC) checks with data from a much wider variety of sources. This allows for a more detailed credit scoring system, as an example, one US platform has 35 sub-grades of loan! This in turn gives investors / lenders more clarity and lets them make more informed investment decisions. Granted this is much more so the case with P2P consumer loans than P2P business loans but things are moving quickly.

As the alternative finance industry continues to grow the platforms themselves will become an invaluable source of data and with a trend towards transparency (you can currently download the loan books of some of the largest US and UK platforms) could be very beneficial to business in general.

Outside of credit risk scoring and investment decisions I believe there will eventually be some cost savings to be had by borrowers as well.

Alternative finance platforms have a great deal of information about borrowers and what they are borrowing for. Hopefully it will not be too hard to implement a system whereby the platform can identify people borrowing for the same purposes (i.e. 100 people all wanting a loan to buy a lawn mower). Then, with the help of some strategic partners, a group discount could be offered and you as the individual suddenly need to borrow less! Watch this space.

In conclusion, there is a huge amount of data out there, alternative finance platforms are using multiple sources of data and clever techniques to help guide better investment decisions, all parties should benefit, it isn’t perfect but it is valuable.

For more information please contact Fergus on 

[1] Data Never Sleeps 2.0 by Josh James, April 23 2014 available at:

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