KGI Bank (凱基銀行), a unit of China Development Financial Holding Corp (CDFHC, 中華開發金控), will not share its financial technology (fintech) experimental business platform with Next Bank (將來銀行), in which it holds a 7 percent stake, as it thinks the Web-only bank should set up a different and independent model.
In its sandbox experiment that started in December last year and ended in August, KGI collaborated with Chunghwa Telecom Co (中華電信) to deploy mobile identity authentication technology to provide loans to customers who possess no credit records and made the applications online.
The bank has gained approval from the Financial Supervisory Commission (FSC) to continue a pilot program from last month to March next year.
Since KGI is a shareholder of the virtual bank, it is a question if the bank would transfer its fintech service to Next Bank.
“We would keep the innovative business allowing consumers to apply for small loans via mobile devices to ourselves, while Next Bank has to run another model independently if it plans to serve this business,” CDFHC president Alan Wang (王銘陽) told the Taipei Times on the sidelines of the company’s earnings conference last week.
Given that KGI has used its own resources to set up the platform and a credit scoring model that determines an applicant’s risk factors and how much it should lend, the bank would continue to operate it, KGI Bank president Amy Tsao (曹慧姝) said.
“We believe every bank has its own lending standards, so we expect Next Bank to set up a new one itself,” Tsao added.
Next Bank director Liu I-cheng (劉奕成) yesterday said he was a bit surprised by KGI’s decision, as he thought they would be able to use KGI’s platform.
“We have not discussed this topic yet … and it might take us some time to decide if to establish another platform by ourselves. But we do think the innovative service benefits consumers and brought great convenience to all,” Liu said by telephone.
The FSC said if the two banks are to use the same platform offering loans to different consumers, it would review their business to see if they comply with regulations.
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