The nation’s first sandbox experiment with financial technology (fintech) innovations — which allows consumers to apply for small loans via mobile devices without bank accounts or credit records — began on Wednesday and has attracted more than 50 applicants per day since, the Financial Supervisory Commission (FSC) said.
The FSC is monitoring the experiment to see if impostor fraud occurs, the commission’s Department of Planning Director-General Lin Chih-chi (林志吉) told the Taipei Times by telephone on Friday.
The experiment was initiated by KGI Bank (凱基銀行) and Chunghwa Telecom Co (中華電信), and enables borrowers older than 20 to be reviewed by the bank using mobile identity authentication technology. After passing the review, they can obtain loans with interest rates set by the bank’s scoring model, which is linked to their telecom payment records.
KGI Bank, a subsidiary of China Development Financial Holding Corp (中華開發金控), said that the 50 applications per day met its expectations, but declined to reveal the number of loan approvals or how much money it has lent.
Even though the bank is allowed to lend money to other banks’ clients in the experiment, “we need to carefully review all applicants,” Victor Huang (黃建榮), senior vice president with KGI’s fintech and new financial services, said by telephone.
“Not every applicant could be approved, especially those who applied to pay off other debts... We think this bears higher risk,” Huang said.
So far, the experiment has proceeded smoothly, and there have been no problems accessing Chunghwa Telecom’s data on applicants’ personal information, KGI said.
In the experiment, people are required to apply on their mobile devices and use a 4G Internet connection, but some applications have been denied for using a Wi-Fi connection, KGI corporate strategy and planning executive vice president Janet Sheng (盛嘉珍) said.
Sheng said some applicants might get a lower interest rate than at a conventional bank, but would not elaborate.
“Our applicants were happy with the interest rate we charged,” Sheng said.
The maximum loan available in the experiment is NT$200 million (US$6.48 million), and 4,000 people would be allowed to participate, the FSC said.
On the sidelines of Fintech Taipei on Friday, FSC Chairman Wellington Koo (顧立雄) said that the commission would review the results of the experiment after six months, and if it is stable and risk-free, the commission would consider amending the rules so that other banks could also use the technology.
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