Shinhan Card Develops Credit Scoring Model Specialized for Older Adults

Reflecting Pension Receipt Information and Self-Employment Status
Exclusive Development of Credit Evaluation Tailored for Customers in Their 60s and 70s

[Asia Economy Reporter Ki Ha-young] Shinhan Card has developed a specialized credit evaluation model tailored for the elderly, strengthening ESG (Environmental, Social, and Governance)-based inclusive financial infrastructure.

Shinhan Card announced on the 27th that it has developed a credit evaluation model for the baby boomer generation (1955?1963). This credit evaluation model has been applied to Shinhan Card's credit evaluation system starting this month and will be fully reflected in the customer base in their 60s and 70s.

This development was promoted to proactively respond to the paradigm shift caused by the acceleration of an aging society. The proportion of customers aged 60 and over at Shinhan Card is expected to increase from 21.4% in 2021 to over 30% by 2026. In particular, as Korea is expected to enter a super-aged society with 20.3% of the population aged 65 or older by 2025, and as the baby boomer generation enters their 60s, the influx of elderly customers is expected to rapidly expand. To prepare for this, the model's completeness was enhanced through about a year of development.

Shinhan Card developed this specialized model as an inclusion measure for the elderly, a financially marginalized group disadvantaged by the existing credit evaluation system, by utilizing its big data. The model comprehensively assesses customers' repayment capacity by reflecting pension receipt information, economic activity information such as self-employment and professional occupation status, as well as sales data and card product usage information that reflect the unique lifestyle of the elderly. Typical credit evaluation models mainly judge based on income and financial activity information, which can be somewhat disadvantageous to elderly people with limited economic activity.

A Shinhan Card official said, "We developed this baby boomer specialized credit evaluation model as part of inclusive finance to meet the financial needs of the elderly and provide various financial opportunities." He added, "In line with Shinhan Financial Group's demographic change response strategy, we plan to strengthen the development of generation-specific customized credit evaluation and risk management models in the future."

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