This paper reviews the main empirical studies concerning the use of new digital technologies in the credit market. The review is organized around three main topics: i) the factors supporting the development of innovative business models for credit intermediation; ii) the benefits of new data sources (such as websites and social networks) and techniques based on artificial intelligence for credit risk assessment; iii) the effects of digitization on access to finance.
Three main messages emerge from the literature. First, the growth of lenders with innovative business models mainly depends upon the degree of local economic development and of competition in the banking sector. Second, new data and methods improve traditional credit risk models because they are particularly helpful in screening opaque borrowers. Third, FinTech borrowers are on average riskier than traditional bank borrowers.
