Could genetic research predict defaults and bankruptcy

Posted by Barry Stamp in Credit Score on 11 December 2012 - Barry is Managing Director at checkmyfile

David Cameron has announced that up to 100,000 people are to have their genetic make-up mapped, and in so doing, the NHS will lead the global race for better healthcare.

The £100m project (i.e. at a cost of £1,000 per individual) is expected to lay the foundations for research into cancer and other diseases which ultimately will help the next generation of sufferers, not only by detecting the predisposition to contracting cancer, but also assisting in the choice of therapies to combat cancers.

In the past, much more mundane medical research has led to major advances in other fields. For example, credit scoring is itself a by-product of research in the 1950’s into the link between socio-economic environments and disease. It was found that the ‘characteristics’ (such as age, gender, income, stability and others) being analysed to predict medical conditions could more accurately predict bankruptcy. That same model was then taken up and extended over decades of work by Bill Fair and Earl Isaac in the US to predict defaults, credit propensity and much more.

It would not be inconceivable that genetic mapping could similarly predict our pre-disposition to falling into arrears, defaults or bankruptcy.

Certainly, there must also be a good chance that genetic research may also be used by health and life insurers in the future. It would take just one step beyond the announced analysis of anonymised medical data, to the analysis of a relatively small sample of known data subjects for a different purpose.

If the principle is established, the financial benefits of such will accelerate genetic research well beyond current thinking.

Barry Stamp is a co-founder of checkmyfile and is a Chartered Banker and a Fellow of the Institute of Credit Management. He can be contacted at barry.stamp@checkmyfile.com.

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