Dr. Kumar Rishabh awarded a grant by the 2022 NSE-NYU Stern Initiative on the Study of Indian Capital Markets
The grant is to support Dr. Rishabh's work on Payment Fintechs. The grant provides a funding of USD 7500. As a part of the grant, he will also present at the NSE-NYU Conference on Indian Financial Markets in December 2022.
Awarded publication:"Can open banking substitute credit bureaus?"
"I approach this question from the lens of a payment-fintech lender. I utilize a setting that allows me to identify the relative predictive performance of payment footprints and credit scores, overcoming the identification problem that results from the fact that lenders screen and monitor borrowers using financial information and credit scores jointly. Using card-swipe level data, and credit scores sourced independently, I predict defaults with machine-learning algorithms, and find that payment footprints have significantly higher predictive performance than credit scores. I find payment footprints substitute credit scores, as combining credit scores with payment footprints does not improve the predictive performance of the combined model over predictive performance of just payment footprints. These results imply that open banking can substitute the costly credit-reporting institutions. Using interpretable machine learning techniques, I identify the most important payment footprint variables that predict default. Further, in an early warning exercise, I show that payment footprints obtained as early as 28 days after loan disbursal, contain useful information for predicting credit default.”
Kumar Rishabh | Research Associate and Lecturer | Financial Markets
Faculty of Business and Economics | University of Basel
Peter Merian-Weg 6 | CH-4002 Basel | Switzerland
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