Duzon Bizon and Shinhan Bank Sign JV Establishment Agreement... Expanding Accounts Receivable Factoring

[Asia Economy Reporter Jang Hyowon] Duzon Bizon (CEO Kim Yong-woo) and Shinhan Bank (President Jin Ok-dong) announced on the 22nd that they have signed a contract to establish a joint venture (JV) for an SME (small and medium-sized enterprises) specialized financial platform business. By combining the ERP platform of a leading domestic ICT company with the financial expertise of a leading bank, a ‘corporate finance specialized platform operator based on accounting and ERP data’ has been created.

In particular, the newly established joint venture aims to transform the loan-centered corporate finance market into a supply chain finance (SCF) market such as accounts receivable factoring, based on an SME-specialized credit evaluation model utilizing accounting and ERP data accumulated on the ERP platform, and to leap forward as an SME-specialized financial platform operator.

In fact, until now, SMEs have been excluded from financial support due to a lack of reliable information for accurate credit evaluation. Shinhan Bank pursued a partnership with Duzon Bizon to solve the information asymmetry problem, which was a major challenge in entering the SME market. Accounting and ERP data accumulate a series of management activity information such as product development, production, distribution, and sales of companies in a time series. By analyzing and processing this information and integrating it with finance, completely new financial services that traditional financial institutions could not provide become possible.

The joint venture will first accelerate the early activation of the accounts receivable factoring business, which Duzon Bizon has already been conducting, by linking it with Shinhan Bank’s financial infrastructure. Subsequently, by pre-providing the necessary financing at each stage of corporate management activities, the ultimate plan is to complete supply chain finance. Once supply chain finance is activated, SMEs will be able to use various financial products with different maturities according to each stage of management activities, instead of procuring various financial demands through loans with maturities of over one year, enabling timely and diverse funding and reducing financial costs.

In particular, the accounts receivable factoring service, which is already in operation, allows companies to quickly convert their accounts receivable into cash by selling them early to factors such as financial institutions before maturity. This not only facilitates smooth fund management but also improves financial structure, leading to an increasing number of SMEs expanding their use of the service.

Shinhan Bank has been pursuing partnerships with various platform companies to preempt the changing corporate finance market. Judging that there is synergy with Duzon Bizon’s ERP platform, which holds data on 2.8 million SMEs, Shinhan Bank acquired shares as a strategic investor in September of the previous year and has now established a joint venture, securing a dominant position in the corporate finance market.

Duzon Bizon has also confirmed the potential for creating new markets through the synergy between accounting and ERP data held on its ERP platform and finance. Through this, it plans to actively enhance the value of its data platform by expanding not only into the financial market but also into B2B commerce and healthcare markets.

Meanwhile, to activate the joint venture’s business, plans are underway to actively promote a cooperative network with various institutions. To this end, on the 16th, Duzon Bizon and Shinhan Bank signed a tripartite memorandum of understanding (MOU) with the Korea Chamber of Commerce and Industry for ‘supporting accounts receivable factoring and digital transformation (DX) solutions for SMEs.’ Accordingly, the Korea Chamber of Commerce and Industry will be responsible for service support and intensive promotion targeting its member companies. The Korea Chamber of Commerce and Industry is a statutory economic organization representing 190,000 merchants and industrialists in Korea, from large corporations to SMEs.

A Duzon Bizon official said, “The establishment of the joint venture with Shinhan Bank is the result of the financial market’s high interest in the accounting and ERP data held by Duzon Bizon,” adding, “To meet the diverse data demands of the market as it is now, we will expand the platform into growth industries and leap forward as the nation’s top data platform company.”