Corporate Loan Screening with 'AI·Big Data'... Acceleration of Digital Transformation in National Policy Banks (Comprehensive)

Mercury and Cadmium, Related Consulting Service Ordered
Corporate Finance Automated Screening System to Be Introduced as Early as Next Year

[Asia Economy Reporter Jin-ho Kim] National policy banks pursuing digital transformation are accelerating the introduction of automated corporate credit screening systems. It is expected that the introduction of systems utilizing artificial intelligence (AI) and big data will minimize problems that may arise during screening through the standardization of procedures.

According to the financial sector on the 9th, Korea Eximbank and IBK Industrial Bank of Korea recently commissioned consulting services for the introduction of automated corporate credit screening systems. The automated corporate credit screening system automatically collects industry information related to corporate credit as well as the financial and non-financial information of companies to conduct the screening process.

Korea Eximbank has decided to introduce an automated corporate finance screening system considering the bank’s business characteristics, which mainly serve export companies. To this end, the design of the automated screening model will reflect policy finance objectives and product characteristics. Korea Eximbank plans to conduct consulting in the second half of this year and aims to introduce the related system as early as next year. This project is being led by Korea Eximbank’s Digital Transformation Promotion Team.

IBK Industrial Bank of Korea will also develop a corporate soundness diagnosis model by utilizing the big data it has accumulated so far. The core is to develop differentiated models that apply screening indicators according to individual company characteristics such as asset size and industry. A scoring model to assess the soundness level of companies will also be prepared.

The push by national policy banks to introduce automated corporate credit screening systems is analyzed as a meaningful move considering that digital transformation has become a key topic in the banking sector. In the case of commercial banks, related systems have already been introduced since 2017. After Hana Bank was the first commercial bank to introduce such a system, Woori Bank and KB Kookmin Bank are also operating automated corporate credit screening systems.

Until now, the corporate credit screening process has mostly been conducted manually. This is because it is difficult to quantitatively handle factors such as economic trends, industry conditions, and licensing restrictions beyond what is shown in financial statements. However, since the process is done manually, errors can occur, and the large amount of reference information often lengthens the screening period.

National policy banks expect that the introduction of automated corporate credit screening systems will minimize judgment errors that may occur during screening through the standardization of procedures. They also highlight the effect of being able to quickly confirm screening results and reduce the burden of screening tasks.

A representative from a national policy bank explained, "The introduction of standardized screening processes and the use of quantitative and objective screening information will greatly enhance risk management functions."

Meanwhile, Korea Eximbank is also known to have recently commissioned architectural design services related to a data center. The construction of the Korea Eximbank data center is one of the core projects of Korea Eximbank’s digital innovation. After completing the architectural design services, Korea Eximbank plans to start construction in June next year and aims to complete it in the fourth quarter of 2023.