160M Chinese took out $173.9B of online loans in 2016 vs. $36B of online loans in the US. China is an ideal laboratory with no reliable credit-history systems minimal data-privacy expectations and high mobile penetration and usage. The online lender Yongqianbao, for example, crunches 1,200 no traditional data points to generate more than 100,000 risk scenarios on each loan applicant in a few seconds.
Among the two startups’ findings from running hundreds of millions of loan applications: iPhone users tend to have lower late-payment rates than Android phone users, and people who don’t answer calls or whose outgoing calls go unanswered represent a higher default and fraud risk. Other red flags: making many changes when filling in the application, letting batteries run down and changing phones frequently. Multiple applications from a single Wi-Fi hot spot is a danger sign. And users who borrow in one city but spend in another are poorer risks.