Mobile Phone Charges and Department Store Spending Also Reflected... K-Bank Develops CSS Specialized for Low to Mid Credit Users

Communication and shopping information pseudonymized and combined with financial data
Loan approval rate for mid-to-low credit and thin-file customers expected to increase by up to 31.5%
Immediate application to all loan products

[Asia Economy Reporter Minwoo Lee] K-Bank has developed a credit scoring system (CSS) that analyzes not only the mobile phone bills of low- to medium-credit borrowers but also their spending patterns at department stores and marts. It is expected that loan opportunities for low- to medium-credit customers and 'thin-file' customers with insufficient financial information will increase.

On the 21st, K-Bank announced that it applied a new CSS specialized for low- to medium-credit customers and thin-file customers with a Korea Credit Bureau (KCB) score of 820 or below to its loan products.

The new CSS analyzes the credit characteristics of low- to medium-credit and thin-file customers from multiple angles based on various financial information such as income level and loan history, creating customized specialized models for each group.

In addition, telecommunications and shopping information were pseudonymized according to relevant laws to prevent identification of specific individuals and combined with financial information. Telecommunications data utilized alternative information such as smartphone plans, installment payments, and payment history related to service usage. Shopping information reflected purchasing and usage trends in fashion, leisure activities, dining out, and daily necessities at department stores and marts. Furthermore, artificial intelligence (AI) machine learning techniques were applied to enable the CSS model to perform more sophisticated credit evaluations.

According to a virtual application analysis of the new CSS, the loan approval rate for the low- to medium-credit customer group increased by approximately 18.3% compared to the existing model. For the thin-file customer group, which has relatively limited financial transaction information, the approval rate rose by about 31.5%.

The use of alternative information also improved the financial benefits of loan products. It is explained that the number of customers whose loan limits or interest rates improved after receiving credit evaluations using the CSS incorporating telecommunications service and shopping data increased by more than 10%.

K-Bank plans to immediately apply the new CSS across all loan products and actively expand its low- to medium-credit and thin-file customer base. Yoon Hyung-ro, Head of Risk Management at K-Bank, said, "We will discover new alternative information in various areas such as analyzing changes in telecommunications data usage and incorporate it into credit evaluations. Through a more advanced CSS, we will continue to focus our capabilities not only on strengthening the competitiveness of loan products but also on risk management."

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