China’s Social Credit Scores: Opening Locked Doors

Data driven credit scoring
Source: glotechtrends

People do almost everything online these days, leaving digital fingerprints everywhere. The advertisements that different people see on Facebook or Google are dependent on what their past online behaviour suggests they will like. This data could soon be used to suggest a suitable new car and even a payment plan for individuals, as predicted by experts wondering how Artificial Intelligence will change the motor vehicle industry. But where should society draw the line?

Since 2014 China has been tracking individual behaviours using a social credit system. All aspects of a person’s life are taken into account, and a number is assigned to each person. This is similar to the credit scores that are used today, but is calculated using far more data.

The higher a person’s tally is, the more opportunities become available to them. Factors that are used to determine someone’s social credit score include the friends that they have online, where they live and how quickly they pay their debts. Those with high scores get perks such as lower interest rates or having their deposits on home and car rentals waived. Conversely, of course, people with lower ratings do not.

Alipay’s Sesame Credit

Sesame credit in action
Source: chinachannel

Zhima means “Sesame” in Chinese, and this private credit-scoring platform was developed for Alipay by Ant Financial. Alipay is under Alibaba, an affiliate of Ant Financial, and is used as a mobile payment platform. In 2015 the People’s Bank of China gave Ant Financial and seven other tech companies permission to develop their own scoring platforms.

The effect that participating in Zhima Credit has on individuals’ ratings within the government system is unclear, and Zhima participation is voluntary. Like Alipay, the Zhima name uses wordplay based on the story of Ali Baba. In that tale, the words “open sesame” revealed a cave filled with treasure. Sesame Credit scores can be as low as 350 or as high as 950 and a greater total, it is implied, will lead to similar fortune.

The details of all advantages are not known, but it’s not difficult to imagine what some of them might be. Consumers might get discounts on various goods and services, or even be given preferential treatment and higher status at online casinos. This may seem a little Orwellian to some readers, and perhaps that is the government’s idea. The Chinese Communist Party looks on social credit scores as a way of gently marshalling people into more cooperative behaviours.

Credit scoring your way to the high life
Source: pixabay

Alipay’s Recent Misstep

As more of life is conducted on mobile devices, and Alipay acts like a “super app” that can be used for everything in China, the information that the platform can mine becomes more extensive. In January 2018, however, the company may have gone too far.

Alipay released a service that gave detailed reports of how customers had used the payment app in the preceding year. These reports included their Zhima scores, with permission granted by default on the Alipay landing page.

Up to this point Alipay was only able to access these scores by getting express permission from users, but the default setting was very inconspicuous and hard to spot. Many people unwittingly “agreed” to have their details shared, and when the action was exposed Alipay found themselves in hot water.

Both Zhima Credit and Alipay have now publicly apologised, but Chinese citizens remain concerned about communications between all companies that are ultimately owned by Ant Financial. In addition, this case has highlighted how often online companies behave in this way.

While all of this is problematic, the fact that people in China are expressing their displeasure is a good sign. Social credit scores and similar systems might soon become more widespread, but it is important to have regulations in place. If this future can’t be avoided, perhaps it can at least be managed.