Lotte Members Partners with NICE to Launch Alternative Credit Evaluation 'Consumption Grade' Service

Lotte Members has partnered with NICE Credit Information Service to develop three types of general consumer grades and will launch the service on the 10th of next month. Representatives from Lotte Members and NICE Credit Information Service are holding a business agreement ceremony. (Photo by Lotte Members)

[Asia Economy Reporter Seungjin Lee] Lotte Members has partnered with NICE Information Service to develop three types of universal consumption grades and will launch the service on the 10th of next month.

The universal consumption grade is an alternative credit evaluation model developed based on Lotte Members' distribution data to complement the limitations of existing CB grades. It can be used as a key indicator to further subdivide credit grades or enhance the discrimination between good and bad credit based on actual consumption ability. In particular, it can help new filers (those with insufficient financial history) such as housewives, young adults starting their careers, and the elderly, as well as first-time financial transaction applicants, to receive financial benefits.

The newly developed universal consumption grades include ▲a comprehensive credit risk prediction model for the entire economically active population ▲an alternative credit grade model for those lacking credit information ▲an alternative credit grade model for first-time financial transaction applicants. These three types can be utilized according to the needs of individuals and businesses.

For example, if L.POINT members agree to have their consumption grade checked when applying for a loan at a financial institution, NICE Information Service evaluates the member's consumption grade based on Lotte Members' data and provides it as a reference for credit screening. The consumption grade is generated based on the amount and frequency of usage at retail stores, and higher grades are considered prime customers, which may result in the omission of detailed screening procedures or exemption from submitting additional supporting documents.

Jeon Hyung-sik, CEO of Lotte Members, said, "We are very excited to work with NICE Information Service, which is leading the improvement of credit evaluation systems in cooperation with major domestic banks." He added, "Through this, not only will the asymmetry of financial information be somewhat alleviated, but also the 40 million L.POINT members will be able to access necessary financial services more easily without being excluded from financial benefits."