Two McGuireWoods lawyers wrote a column for the November-December edition of Illinois Banker magazine about the use of big data by financial technology lenders.
In the article, “Big Data and Its Big Impact on FinTech Lending,” San Francisco associate Alexander Gershen and Chicago partner Sarah Zielinski explore whether analysis of voluminous consumer data promotes the expansion of or reinforces disparities in access to financial capital.
The creative uses of data have presented new opportunities to lenders who can “effectively identify borrowers and tailor marketing materials to a precise demographic,” the authors wrote.
But, they later admonish, as FinTech lenders begin to serve subprime borrowers, “concerns emerge that Big Data’s promise of expanded access is all but a pipedream.” Specifically, some question whether data can be used to exclude populations and reinforce existing disparities in access to capital.
