The Klout-Influenced Credit Score Would Give Credit Where It Isn’t Due

*This post originally appeared on MyBankTracker

If you’re an insufferable person who speaks on social media panels with any degree of regularity, you’re probably more aware of what your Klout score is than you are your credit score. After all, you can check your Klout score all day — you can only check your credit score once a year from each bureau. Who has the time? You live an active social media lifestyle, and retweets probably matter more to you than your mortgage rate. You are pretty terrible. Well we’ve got good news for you: at Movenbank, your social media influence might soon influence your credit score — a terrifying thought!

Movenbank, a soon-to-launch financial services company, launched something called the CREDscore in private alpha. It is comprised of a number of different factors: your actual credit score, your personality and, yes, your social media influence. Strange as it sounds, Movenbank might actually make business decisions based on your Klout — or something a lot like it.

First, Movenbank puts you through a financial personality quiz to better understand your relationship with money. You’re assigned a “type”: salesperson, professor, accountant, rockstar, entrepreneur, officer, artist (wouldn’t want to get that one!), breadwinner or trader. For now, this is just filler, but it might factor into your score in the future.

The CREDscore also takes into account actually important financial information like annual income, how much you save per month, how much you have saved up, and your FICO score. So there is hard data factored into the score.

But users can also connect their Facebook, Twitter, LinkedIn or Google Plus accounts to give Movenbank a better sense of your social media influence. The company explains why in a blog post that describes different credit profiles that a CREDscore could benefit. Here’s Ashley, someone who has fallen on hard times, but has a lot of LinkedIn contacts:

Then there’s Ashley. Ashley’s a bit older than Matt and Jessica, but he lost his job a few years ago. Then he lost his house. Ashley’s suffering. The bank foreclosed and now he can’t get any opportunity to get new things started.

But he has an idea. He wants to launch a new business that makes funky trainers that tweet and check-in on foursquare as you run.

Sounds stupid, but don’t be fooled. According to LinkedIn, Ashley has a heavy influence on some potential investors who are sniffing around the ‘Tweener,’ as he calls it. The only thing is he has a problem. The mainstream financial service providers don’t want to know him.

Here at Movenbank though, we love Ashley.

We love Ashley because we can see he’s on the cusp of a breakthrough. But we can’t just give Ashley all the things he wants, so we offer him a deposit account and a limited loan facility to get the business started. The loan facility increases over time, as his Klout increases.

One reason why underwriters typically rely on hard data when assessing credit risk, is because dangling lots of money in front of people who need it desperately can often make them less than honest. Low-documentation and no-documentation loans are called “liar loans” for very good reason: if you’re self-reporting income to qualify for a mortgage, it’s easy to fudge it upward a bit, especially when your mortgage broker encourages you to. Despite what Movenbank would like to think, it’s very easy to fake social media influence — it’s just a pathetic and humiliating experience most of us would readily avoid. Unless we really wanted a loan from Movenbank, perhaps.

This sort of thinking only makes sense if you’re constantly surrounded by tech entrepreneurs all day, as they network and jockey for money and influence. Most of us never need business loans for shoes that integrate with social media. Our financial needs are personal: saving for our first home, retirement, our kids’ education, a vacation, whatever.

But in its defense, CREDscore addresses these issues, too. A higher CREDscore might mean better terms for customers on their accounts: higher savings rates, lower borrowing costs, or lower fees. Strangely, the range is not yet public; those who have been given CREDscores have not been told whether it is good, bad, mediocre, anything. Just: here’s a number, it might mean something later.

Movenbank will launch to the public later this year. And people with parody Twitter accounts might get a better rate on their savings account than you do. It’s strange, because one might reasonably suspect that introverts might have better financial habits than people who tweet every thought or joke that pops into their head. Being impulsive online is different from being impulsive at Macy’s, sure, but being freed of the rigors of a social life would likely cut 40% of the spending out of my monthly budget.

Klout is likely as good a measure of creditworthiness as waistline. Sure, I can infer a lot of lifestyle differences between the man with the 44 inch waist and the man with the 30 inch waist, but just because one probably spends more of his income on cheeseburgers, it doesn’t really tell me how likely he is to pay back a loan — and it definitely doesn’t mean he’s worthy of lower fees or higher savings rates, or vice versa.

But the CREDscore is still in its testing phase. It’s quite possible that none of this will come to pass. So you can stop spamming LinkedIn VC groups — you might end up burning bridges.

About Willy Staley:  Willy is a 25-year-old writer, and as a native San Franciscan, he is unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Bank with Brett King in 2012

Brett King, author of BANK 2.0, announced that he plans to launch his own bank in 2012. According to an exclusive in Technology Spectator, Brett secured a major investor and is building a team in preparation for the launch next year.

The bank, MoveNBank, will be an online-only bank that is in a position to compete with US start-up Bank Simple. According to Technology Spectator, MoveNBank will also be paperless, focused on mobile and aims to reinvent the customer experience.

The publication wrote, “The development of companies like MoveNBank and Bank Simple is just the start of an emerging trend towards virtual banks seeking to capitalize on the consumerisation of technology…. With the emergence of companies like MoveNBank, the day is finally coming when banks will have to make a decision. Plod along as a cost heavy, full-service outfit with multiple channels to serve customers, or restructure as a provider of back-office functions, a banking license and the other must-haves nimbler organizations need to successfully take their proposition to market.”

What are your thoughts on organizations like MoveNBank and Bank Simple? Will they disrupt the traditional brick and mortar banks? Let us know your thoughts below, or Tweet @bankingdotcom.

Steve Jobs and His Impact on the Banking Industry

The news of Steve Jobs’ resignation hit Twitter with thousands of Tweets echoing the news of his resignation. As a well recognized and idolized CEO, Steve Jobs changed the way consumers use personal computers, tablets, music and more. Not only did he bring Apple’s stock from $7 a share in 2003 to approximately $400 a share in 2011, he enamored a market and even the youngest children in today’s generation are asking their parents for iPhones and iPads.

You’d be hard pressed to find an industry that was not touched by Steve Jobs, and banking is no exception. Most financial intuitions have their own iPhone and iPad apps that consumers can download and use on-the-go, but beyond that, banks have started installing touch screens, facial recognition in signage displays, media walls and other touches that are reminiscent of Apple.

Brett King, author of Bank 2.0: How Customer Behavior and Technology Will Change the Future of Financial Services, wrote, “When historians look back at the massive shift in banking and the rapid decline in branch activity, the death of cheques, plastic and cash — the inflection point will be the creation of the App Phone. This is perhaps Steve Jobs’ greatest legacy for banking today. He has changed the way our customers behave, he’s changed the way we think, and the way we demand service. Thanks to Steve Jobs’ vision — banking of the future will be about banking embedded everyday into our life, a true utility, and no longer a place you go.”

You can read Brett’s full article in the Huffington Post.

How do you think Steve Jobs changed the banking industry? Do you agree with Brett King? Let us know in the comments section below, or Tweet @bankingdotcom.