Bank pricing strategy based on continuous personal data reporting in the credit interest rates

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Bank pricing strategy based on continuous personal data reporting in the credit interest rates

Kirill Romanyuk

(about the author)

Romanyuk Kirill A. – Postgraduate Student at the Chair of Information Systems in Economics and Management (Peter the Great St. Petersburg Polytechnic University)

Published in:
Russian Journal of Entrepreneurship
– Volume 16, Number 14 (July, 2015)

Keywords: adverse selection, credit rating, information asymmetry, knowledge management, pricing strategy

Citation:
Kirill Romanyuk (2015). Bank pricing strategy based on continuous personal data reporting in the credit interest rates. Russian Journal of Entrepreneurship, 16(14), 2157-2174. doi: 10.18334/rp.16.14.526

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Abstract:

The article suggests a bank pricing strategy based on credit rates differentiation according to expected loan losses to motivate persons to provide personal information. It is demonstrated that the accuracy of potential borrowers’ credit rating affects the bank’s ability to display personal information of clients in the interest rate. It is established that the use of a continuous credit worthiness scale allows to fully reflect private information in the credit interest rate.

References:

Bank pricing strategy based on continuous personal data reporting in the credit interest rates

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