As it prepares to conduct a sandbox experiment with Chunghwa Telecom (中華電信) in December, KGI Bank (凱基銀行) yesterday said that it is to use 10 factors to create a scoring model for microcredit, one of which would be paying telecom fees on time.
China Development Financial Holding Corp (中華開發金控) reported NT$8.53 billion (US$275.87 million) in net profit for the first three quarters, up 31 percent from the same period last year, with its subsidiaries, China Life Insurance Co (中國人壽) and KGI Bank, accounting for 30 percent and 24 percent respectively.
For the first three quarters, KGI Bank enjoyed 17 percent growth in net interest income and 12 percent in net fee income, KGI Bank president Richard Chang (張立荃) told an earnings conference in Taipei.
The bank’s loan balance reached NT$338.6 billion, with mortgages expanding 30 percent from a year earlier to NT$72 billion, Chang added.
However, financial asset gains plunged 66 percent to NT$758 million, Chang said, attributing the showing to “surging yield of US treasuries, volatility in global stock markets and a NT$240 million loss from transactions in Canadian dollars in April.”
The bank suffered a 11 percent decline in net profit from the same period last year, Chang said.
Seeking to expand its customer base, KGI Bank is to focus on its fintech experiment and, if the sandbox succeed, plans to apply telecom mobile identity authentication technology into its securities and life insurance businesses, China Development president and CEO Alan Wang (王銘陽) said.
The bank would establish a scoring model to set a pricing strategy for microcredit, the current interest rate of which is 3 to 15 percent, China Development executive vice president Brian Chou (周郭傑) said.
In the sandbox, people without any bank accounts or records who wish to borrow can apply online in four steps, while the current process requires customers to apply in conventional banks and takes eight steps, Chou said.
“Right now, only 70 percent of applicants could get approved and receive loans,” but with telecom payment records, the bank could know customers better and more people would be able to secure loans, it said.
Given its low ratio of young clients, the bank hopes to draw their attention through the experiment and turn them into potential wealth management clients, Chang said.
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