KGI Bank (凱基銀行), a subsidiary of China Development Financial Holding Corp (中華開發金控), yesterday said that consumers would be able to apply for small loans on their mobile devices within three minutes when the bank starts to adopt its mobile identity authentication technology in its sandbox experiment next month.
The Financial Supervisory Commission (FSC) on Sept. 18 approved the first sandbox experiment jointly filed by KGI Bank and Chunghwa Telecom Co (中華電信), which is to begin on Dec. 5 and would allow people without a personal account or credit record to apply for small loans or credit cards online.
“While people have to spend much time waiting at conventional banks to apply for loans, they will save a lot of time by using KGI’s new service,” China Development Financial chairman Chang Chia-juch (張家祝) said at a news conference in Taipei.
Applicants, who need to be Chunghwa Telecom subscribers, are required to take photos of their ID cards and business card when applying online, as well as provide their mobile phone number, ID number and the amount they wish to borrow, KGI vice president Victor Huang (黃建榮) said.
“They must apply on their mobile and use their own 4G Internet connection, as the bank will check with the telecom if the applicant’s ID number and mobile IP address are correct,” Huang said.
After checking that the information filed by the applicant is consistent with the telecom’s data, the bank would call the applicant twice to check their personal information, in a bid to reduce the possibility of fraud, he said.
“In Taiwan, there are still 1.2 million people who do not use financial services, but given that 4G penetration rate in the nation reached 100 percent in April, the commission hopes the new service would benefit those people,” FSC Vice Chairman Chang Chuang-chang (張傳章) said.
The experiment would cease if there are four cases of fraud, the commission said.
“If a fraudster steals another person’s phone and ID card, and are able to answer the questions, it is possible that they could cheat the system, which also happens at conventional banks, but the fraudster would not receive the money, as the loan would be transferred into the account of the person they were pretended to be,” Huang said.
The bank would not charge an interest rate lower than 3.25 percent on the small loans in the experiment, but people with good mobile payment records might get a lower interest rate compared with applying for a loan at a conventional bank, KGI strategy department vice president Janet Sheng (盛嘉珍) said.
An experiment conducted earlier this year showed that consumers’ mobile payment behavior is correlated with their loan repayment behavior, so the bank is hoping to select borrowers more effectively using the telecom’s payment records.
Besides the first experiment, the commission has received five other sandbox experiment applications, including three for remittance services for migrant workers, Department of Planning Director-General Lin Chih-chi (林志吉) said.
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