Our Digital Footprints: Credibility As-A-Service

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At Snapdeal-FreeCharge, I heard from Kunal (Shah), his early symphonies on consumer psychology, habit formation, design, trust and growth flywheels, now widely disseminated on his massively followed social media handles. Kunal is the founder of Cred.

Lot has been talked about Cred, mostly rhetorical observations on valuations, business model and their recent neumorphic design.

Here is what i shared in June 2020, when a digital media journalist pinged me, i said,

“Cred pampers India’s well off with a brilliantly designed digital concierge of products and services, built atop the flywheel of a monstrously efficient, near magical card paying utility. Other features like lending, rent, rewards are maybe, could, would be.”

Cred needs to invert, instead of pampering the creditworthy, it must build ‘the’ new system of (Cred)ibility.

Cred must offer a radically new alternative to long broken Credit Bureaus, the half-century old anachronisms, expired, rent seeking institutions, which ironically, by facilitating user-card-data-access, midwifed the very birth of Cred, which can now offer a true alternative to them.

We need a visionary entrepreneur to fix it, Kunal has a moon-shot of an opportunity to democratise credibility.

Credit Bureaus inter alia, earn money from lenders, the furnishers of data, by vaulting & scoring borrower data via their out-dated algorithms. The data is also packaged and sold as analytical reports to third parties. Credit card data and personal information from the bureaus, has been fairly consistently hacked, stolen and sold on the dark-web, the world’s digital black market.

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Credit Bureaus are simply broken, they were made for a certain era and do not belong to this digital era.

There are discrepancies in bureau reports with zero recourse for consumers. Consumers have zilch visibility on how their credit behaviour is scored, there is no two-way communication with the bureau, consumers can write ‘letters’ to the bureau and they can chose not to respond. India’s hawk central bank which prides itself on consumer protection does not have the bandwidth to stir up another hornet’s nest.

The very real scenarios of wilful vs inability-to-pay defaults/late payments scenarios are never factored. A bad credit record can cluster-four-letter-word a borrower’s reputation ultra hard, leaving them for life, to the mercy of thin-file lenders offering loans at multiples of bank interest rates with iron fisted terms and conditions.

Salons, Restaurants, Gyms whose businesses were impacted by COVID lockdowns with no payments accruing for months should have been proactively “white flagged” by their lenders and loans put on automatic moratorium. With the avalanche of data on consumers and businesses, the bank and credit bureaus could have ensured this, but did not. Bank interest earnings compound when the borrowers default, credit bureaus earn credibility when lenders pull credit records with red flags.

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We need a democratised ‘trust token’ based system of credibility built on the tenets of data security, data ownership and transparent multi-party consensual data exchange of composite digital footprints, powered by trust and technology.

Consumers deserve more & better, this is where the Cred fits in, it could fire up this credibility revolution.

Probe yourself with three questions:

  1. Why do only credit payment records, denote someone’s credibility, for instance, qualifying for a financial services job requires a mandatory credit bureau ping.

  2. Why so much market power to these inefficient, slumbering and will eventually expire, credit bureaus ?

  3. Everyday most of us leave digital foot prints, should these not be accounted to determine our credibility.

We leave so many digital footprints everyday using app based cabs, online food delivery, epayments, ecommerce shopping,  video streaming, e-gaming, consuming  digital media, using mobile banking and via social media platforms. Why not use this data to build a new system of credibility, where everyone wins.

We need a democratised credibility system built on the tenets of data security, data ownership and transparent multi-party consensual data exchange of composite digital footprints, powered by  technology.

This new credibility system will comprise of all players in the digital ecosystem – banks, consumers, billers, social media platforms, e-commerce companies, fast payment methods, payment gateways and  digital goods providers.

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Cred could build this system, leveraging technology. It will most importantly build and resolve trust issues between all stakeholders. Consumers will control their digital footprints and decide what data to share, when to share and with whom to share. Think about the network effects of this composite credibility system.

Use cases of the (Cred)ibility trust-token:

  1. Lenders can offer individually tailored products.

  2. Insurers can tailor premiums gauging risk individual risk profiles.

  3. e-Commerce users could get early access to flash sales, based on the credibility.

  4. Ride hailing users who do not cancel rides when the driver is at their doorstep, could get preference, when cab demands far-far outstrips supply (Rains !)

  5. Fresh college graduates can begin building their digital (Cred)ibility

The use cases are infinite, each amplifying with the network effects of the trust—token based (Cred)ibility system.

Okay, the business model: Cred earns every-time the token is used.

With a decentralised, trust-token based credibility system replacing the broken credit bureaus, every one wins !

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PS: Last week, I wrote on the India-China App warfare (published in BusinessWorld)

Your Digital Footprint | ICT Reverse

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Vibhu Arya
Vibhu has previously worked in India, Middle East, South East Asia, and China across banking, e-commerce, fintech, varied payment types, remittances, and blockchain.
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