If you do not research it – it will not happen?

Over the last days plans to do research on the use of public date from social networks to calculate someone’s credit risk made big news (e.g. DW). The public (as voiced by journalists) and politicians showed a strong opposition and declared something like this should not be done - or more specifically such research should not be done.

I am astonished and a bit surprised by the reaction. Do people really think if there is no research within universities this will (does) not happen? If you look at the value of facebook (even after the last few weeks) it must be very obvious that there is a value in the social network data which people hope to extract over time…

Personal credit risk assessment (in Germany Schufa) is widely used – from selling you a phone contract to lending you money when buying a house. If you believe that we need a personal credit risk assessment - why would you argue that they work on very incomplete data? Will it make it better? I think the logical consequence of the discussion would be to prohibit the pricing based on personal credit risk ratings – but this, too would be very unfair (at least to the majority). Hence the consequence we see now (the research is not done in Universities) is probably not doing much good… it just pushes it into a place where the public sees little about it (and the companies will not publish it in a few years…).