'Safe Driving' Good Drivers Get Loan Interest Rate Discounts

KCB·Tmap Hold Kickoff Meeting and Begin Discussions
Considering Credit Score Differentiation Based on Tmap Driving Scores

[Asia Economy Reporters Eunju Lee and Seungseop Song] In the future, drivers with safe driving records are expected to receive benefits such as interest rate reductions during the loan process. Korea Credit Bureau (KCB), which provides credit evaluation scores to most domestic banks, has begun working with Tmap Mobility to enhance the credit scoring system (CSS). Non-financial indicators such as driving history data held by Tmap Mobility are expected to be reflected in borrowers' loan screening processes.

According to the financial industry on the 13th, the two companies recently held several kickoff meetings and started discussions to build a new credit evaluation model. They have agreed to enhance the CSS by utilizing accumulated driver driving history data through Tmap as a credit evaluation factor for borrowers. Tmap has been calculating driving scores based on driving data from drivers using its navigation system, and this score is expected to be incorporated into the enhanced CSS developed by the two companies.

Tmap calculates a 'driving score' based on the safe driving records of drivers using its navigation system. It assesses not only simple driving movement records but also data on speeding, rapid acceleration, and sudden deceleration to calculate the driving score. Users who consent to data usage can manage their scores and provide them to insurance companies to receive discount benefits. A financial industry official explained, "Recently, the financial sector has shown interest in discovering and reevaluating borrowers such as substitute drivers and freight truck drivers, who are rated low in creditworthiness but are actually less likely to default," adding, "Therefore, attempts are underway to integrate and utilize accumulated data from mobility companies in finance."

Recently, enhancing the CSS has become a trend. The financial sector has long pointed out limitations in accurately assessing borrowers' credit information. By improving the CSS using non-financial information that was previously not considered, it becomes easier to distinguish between high-risk and high-quality borrowers. 'Thin filers,' who have good financial conditions but lack financial history and thus face difficulties obtaining loans, can also be newly included as customers. From the consumer's perspective, their credit situation is more accurately reflected, allowing them to receive preferential treatment in terms of credit limits and interest rates.

As a result, competition in the alternative credit evaluation market is intensifying. Until now, the domestic personal credit evaluation company market was dominated by three companies: NICE, KCB, and SCI Evaluation Information. However, recently, financial companies have been working on combining alternative credit evaluations with their own CSS. Last month, KakaoBank developed the industry's first 'KakaoBank Score.' This model utilized pseudonymized combined data from 11 institutions, including Lotte Members and Kyobo Book Centre, totaling 37 million records. Toss Bank developed the Toss Scoring System (TSS), which uses account information, card information, and self-employed sales data.

KCB is also accelerating efforts to incorporate alternative credit evaluations into the CSS. In January of this year, it launched an alternative credit evaluation service using automatic transfer payment information in collaboration with the Korea Financial Telecommunications & Clearings Institute. After analyzing the usefulness of payment information with the institute, which processes about 1.7 billion annual automatic transfer account transactions, it was found that young adults, housewives, and university students classified as thin filers (those lacking financial history) benefit from interest reductions. A financial industry official said, "The more competitive data we secure to assess creditworthiness, the more positive the impact on expanding loans to thin filers."