Kakao Pay and Kakao Bank Collaborate on Data for Building Credit Evaluation Model

[Asia Economy Reporter Kang Nahum] Kakao Pay and Kakao Bank are collaborating on data to develop and advance credit evaluation models.

The two companies announced on the 17th that starting this month, they will receive necessary data from each other, analyze it, and reflect it in their credit evaluation models.

Kakao Pay will provide payment and customer behavior data generated within its services to Kakao Bank, while Kakao Bank will provide loan and deposit data to Kakao Pay. However, information related to each company's partners will not be shared at all.

Kakao Pay will combine Kakao Bank's data with its alternative credit evaluation model, which is being prepared for customers with insufficient financial history, to complete a more accurate and sophisticated evaluation model.

The alternative credit evaluation model will be first applied to Kakao Pay's postpaid payment service, and the companies plan to promote cooperation such as mutual data exchange with other financial firms to provide advanced services.

Kakao Bank will utilize Kakao Pay's data to enhance its current credit evaluation model and develop credit evaluation models that can offer reasonable loan interest rates and limits to customers with insufficient financial history, such as young adults starting their financial life, and medium-credit customers.

The new mid-interest and medium-credit products that Kakao Bank will launch in the second half of this year are expected to apply credit evaluation models reflecting data analysis with Kakao Pay.

This data collaboration will be conducted in accordance with relevant laws by pseudonymizing personal information, deleting some or all parts so that specific individuals cannot be identified. The pseudonymized information provided by each company will not be directly delivered to the two companies but will be combined through a third-party specialized institution.

The two companies also plan to collaborate on data with other major Kakao affiliates.

This content was produced with the assistance of AI translation services.