The digitization process of banking services, which brings with it the diffusion of algorithms, risks damaging the weakest sections of society in terms of access to credit. This was supported by the Deputy Director General of the Bank of Italy, Alessandra Perrazzelli, who, speaking at the 51st Credit Day, highlighted a contradiction: "On the one hand, digitization is able to extend access to financial instruments to subjects who are previously excluded: this is possible thanks to lower operating costs and the ease of use allowed by the apps. On the other hand, the improved ability to predict defaults, also connected with digitalisation, can have ambiguous effects on access to credit for the most vulnerable segments of the population. Lower monitoring costs can improve the conditions practiced, but at the same time the use of some very granular data, for example on ethnicity and consumption habits, can worsen them”.
Perrazzelli then recalls that "a recent study carried out with American data shows that the introduction of machine learning algorithms has resulted in an increase in the interest rates charged on mortgages to African-American and Latin American customers compared to the rest of the customers . It is important to collect further evidence in order to design a framework of rules on the use of information that ensures that the digital revolution increases and does not reduce financial inclusion".
DIGITALIZATION OF BANKS: IN ITALY STILL A LOT TO DO
At the same time, the deputy general manager of the Bank of Italy also underlines that in our country the digitization of the banking sector "is underway but is still far from being completed".
In particular, digitization is complete only in the payment instruments segment: out of almost 300 banks analyzed by via Nazionale, it appears that all allow online payments. The offer of savings management tools through digital channels is also quite widespread, but “there is a more generalized delay in the offer of online loans – continues Perrazzelli – especially to businesses. In this context, technology is used to offer information-type services such as the request for estimates, and rarely allows the signing of the contract to be completed”.
As for the big data exploitation projects, "they have been launched by all the larger intermediaries and only partially by the others - concludes Perrazzelli - Projects that today have purely commercial purposes: their use for risk assessment is still very limited, the pricing and monitoring of customers as part of the credit disbursement activity”.
IVASS: THE WIDE DIGITAL OFFER RISKS OVERWHELMING CONSUMERS
As far as customers are concerned, however, "the wide digital offer risks overwhelming the consumer's ability to choose, at the same time creating situations of disorientation and 'capture' - noted the general secretary of IVASS, Stefano De Polis – The illusion of autonomy and self-determination that the web generates in customers paradoxically produces the widening of the risks of misselling, the proliferation of external influences and even virtual deceptions”.
For this reason, “it is a widely held belief among operators and authorities – continues De Polis – that the advent of digitization does not make the importance of human relationships disappear – concludes De Polis-. The two dimensions must redefine themselves, complementing each other to maximize the benefits. Advanced experiences of mass digital offer of insurance products - such as those underway today in China - show that even the large digital platforms foresee, as a fundamental moment of professional support to the customer and of the sales experience, the establishment of a direct relationship with an agent".
