Why Digital Footprint Is Crucial To Get A Loan


Retail loans have become highly competitive. Apart from traditional banks, more and more independent financial institutions have started offerings retail loans to consumers in India. Whether it is a traditional bank or a non-traditional banking institution, all of them rely on the digital footprint of an individual before approving a loan application.

What is a Digital Footprint?

Simply put, a digital footprint is your information online that traces your identity. In the financial world, a digital footprint would be your data that is both for your identity as well as your financial background and your past record with banks. All financial institutions and banks make use of digital footprints as one of the important parameters to evaluate an individual application. Unlike earlier times before the internet, loans were approved based on financial paperwork, and accessing the applicant by meeting them personally in order to evaluate them. However, with the emergence of digital world and the reliance on electronic and automated financial processing, banks and financial institutions use digital data to measure an applicant’s financial ability.

When is a Digital Footprint applicable?

Digital footprints are mainly used to evaluate applicant’s who have no prior credit history. Since there is no credit score to fall back on, banks access the credit worthiness of an individual based on their social media usage, the way they make their bill payments online – usage and payment frequency, the amount of online purchases they make, as well as the various places they visit by checking in online at social media sites such as Facebook. So every time you make an online transaction or an online update that could help banks ascertain your credit worth, you are leaving a digital footprint.

India is developing at a rapid pace and with a larger population under 30, there is a huge business opportunity for banks by offering loans and financial services to people who have just started working. Banks certainly do not want to hold back reaching such a large population just because they do not have a prior credit history. This is why more and more banks and independent financial institutions are relying on digital footprints to acquire new customers and enhance their lending experience.


Banking in a digital world is truly an exciting experience for both the banks and the borrowers. Digital Footprint technology has made it possible for banks to reach out to an untapped audience and has helped individuals reach financial goals. India still has yet to offer risk-based lending model that will allow financial loan products to be available on an even broader scale. The government’s goal to provide a bank account for every Indian and linking Aadhar cards to bank accounts is a step in the right direction as this will eventually help unprivileged class to have access to affordable loans, thanks to their introduction into the digital world and their very own digital footprint!

Main Category: Loans