***...The use of digital footprints has set high expectations for financial inclusion. The World Bank has asked “Can digital footprints lead to Greater Financial Inclusion?” (Kumar and Muhota 2012), while a headline of the Harvard Business Review suggested that “Fintech Companies Could Give Billions of People More Banking Options” (Kendall 2017). Venture capital firms are pouring money into start-ups that aim to evaluate the creditworthiness of unbanked people without historical data on repayment behaviour. This line of thought suggests that digital footprints have the potential to extend financial inclusion to parts of the currently two billion working-age adults worldwide that lack access to services in the formal financial sector.
However, there is a dark side, too. When digital footprints are used in practice, headlines quickly converge on privacy concerns. “Admiral hikes insurance costs for drivers using Hotmail email addresses”1 was a headline in The Sun this year, highlighting the existence of ‘statistical discrimination’ where decision makers use group statistics as proxies for unobservable, outcome-relevant characteristics (Fang and Moro 2011). Concerns over the use and misuse of digital footprints have been prominently manifested by China’s Social Credit System (Creemers 2018). This dark side view suggests that the use of digital footprints can have a considerable impact on everyday life, with consumers constantly having to consider these footprints which are so far usually left without any further thought....
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