Seoul, South Korea - Naver Financial, the fintech arm of South Korean tech giant Naver, has launched a new alternative credit scoring model called "Naver Pay Score."
Developed in partnership with NICE Information Service, the model uses non-financial data to improve credit scoring and expand lending opportunities.
K Bank and SBI Savings Bank are the first financial institutions to adopt Naver Pay Score for their personal loan products.
The Naver Pay Score model uses credit information and approximately 73 million pseudonymized data, processed using big data processing technology and AI machine learning.
The model aims to provide a more comprehensive credit risk assessment by incorporating non-financial data such as Naver Pay usage history and asset data based on MyData.
For businesses, data from Naver's Smart Store and Smart Place, including transaction amounts, delivery and response times, reviews, and reservation numbers, are also included in the assessment.
Naver Financial emphasizes that the Naver Pay Score will only be used positively during the credit assessment and will never negatively impact the outcome.
Naver Financial and NICE Information Service conducted simulations that applied the Naver Pay Score to users of online loan comparison platforms.
The results showed that the credit evaluation model's discriminative power index improved by 13.57 percentage points compared to the existing model.
Approximately one-third of users could receive interest rates and limited advantage benefits.
Using the Naver Pay Score, K Bank and SBI Savings Bank will refine their internal underwriting strategies.
They aim to maintain credit soundness while expanding new loan customers and providing additional limit or interest rate benefits to existing customers.
