Measuring Social 'Trust' to Make Loans - NYTimes.com

Friends with financial benefits

"Vouch Financial, which is emerging from its pilot testing phase this week, has an unusual spin on the data science approach. Big data lenders often analyze a person’s social network on LinkedIn or Facebook as one signal, among many, for hints about how reliable a payer a loan candidate is likely to be. But Vouch wants you to construct a social network of people who trust you financially — people who will, yes, vouch for you.

The Vouch formula looks to back to a bygone era of banking when community bankers routinely asked their customers for “social character” references before granting loans. “We’ve taken that principle and digitized it,” said Yee Lee, co-founder and chief executive of Vouch."

Measuring Social 'Trust' to Make Loans - NYTimes.com