Shinhan Card Launches Big Data-Based Alternative Credit Evaluation Project for Financially Marginalized Groups

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[Asia Economy Reporter Yu Je-hoon] Shinhan Card is developing an alternative credit evaluation model using card approval big data and is set to actively pursue related business.

On the 19th, Shinhan Card announced that it held a business agreement ceremony with Crepas Solution, an institution licensed for non-financial specialized personal credit evaluation, at its headquarters in Jung-gu, Seoul on the 18th. Since its establishment in 2015, Crepas Solution has operated alternative credit evaluation solutions and youth microloans such as Youth 5.5, specializing in alternative credit evaluation. Last year, it obtained the first domestic license for specialized personal credit evaluation.

As the only financial company, Shinhan Card was selected in June last year for the '2021 Data Flagship Project' hosted by the Ministry of Science and ICT and the National Information Society Agency, participating together with Crepas Solution under the theme of 'Data-based financial inclusion measures for financially marginalized domestic and foreign residents.'

Through this project, an alternative credit evaluation model was built targeting Thin-Filers, customers with insufficient credit history, by utilizing mobile, card approval data, and digital behavior data that are not used in existing credit evaluation model systems.

In particular, the target was divided into young adults with limited financial history and foreign residents in Korea who are disconnected from financial information, developing services tailored to each characteristic. As a result, the credit grades of the financially marginalized group, which were concentrated about 58-78% in the mid-credit rating in existing credit evaluation models, were subdivided, enabling the identification of high-quality customers and providing additional financial opportunities.

Shinhan Bank and Crepas Solution have decided to advance the alternative credit evaluation service and pioneer new businesses through data cooperation based on this agreement. It is expected that this will provide practical services to financial companies and Buy Now Pay Later (BNPL) companies.

An Jung-sun, Head of Life Information Group at Shinhan Card, said, "Through this agreement, we can provide a reasonable evaluation system to financially marginalized groups such as Thin-Filers, helping to close the gap in financial opportunities." He added, "We will strive to revitalize the data economy and improve financial inclusion by leveraging Shinhan Card's big data capabilities."

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