Shinhan Bank Completes System Providing Guide for Objectifying Non-Financial Factors in Corporate Credit Rating Model

Expansion and Implementation of the Banking Sector's First Data-Driven Non-Financial Objectification Model

[Asia Economy Reporter Yu Je-hoon] Shinhan Bank announced on the 11th that it has become the first bank in the industry to apply the 'non-financial objectification' model to all items in the corporate credit evaluation section.

The non-financial objectification guide provision system offers guide information that enables the evaluation of non-financial factors such as business and management risks, which were previously assessed qualitatively during corporate credit evaluations, using the latest diverse data. Since June 2019, Shinhan Bank has been the first in the banking sector to establish a data-driven non-financial objectification model in the corporate finance division and has provided guide information for some items.

With the completion of this system, Shinhan Bank now provides guide information for all items, enhancing the performance of non-financial evaluations by utilizing not only existing data such as the National Pension Service and National Tax Service tax information but also alternative information like data from the Korea Financial Telecommunications & Clearings Institute (accounts receivable, automatic transfers, etc.).

Through providing non-financial evaluation guides, Shinhan Bank has drastically reduced the time and cost required for non-financial evaluations, increased the objectivity and accuracy of credit ratings, supported the growth of high-quality companies, and strengthened its competitiveness in risk management.

A Shinhan Bank official stated, "Based on the experience of expanding the implementation of the non-financial evaluation guide, we plan to continuously discover various alternative information and upgrade the credit evaluation model. We will expand customized corporate services through credit evaluation innovation."

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