"Corporate Loans in Just One Day... Non-Face-to-Face Innovation Customers Can Truly Experience" [Financial Insider]

▲ Yeounjung SME Credit Team Manager and Lee Junbeom SME Product Development TF Manager are being interviewed by this publication at the K Bank headquarters located in Euljiro 4-ga, Seoul.

"Easy, fast, and convenient. We focused on these three aspects during development to ensure customers can truly experience non-face-to-face innovation."

Lee Jun-beom, SME Product Development TF Manager, and Yeo Woon-jung, SME Credit Team Manager at K-Bank, which launched the first real estate-secured loan for individual business owners among internet banks, said this in an interview with our publication on the 13th.

K-Bank's real estate-secured loan for individual business owners, launched last August, provides working capital up to 1 billion KRW. The individual business loan market, worth 45 trillion KRW, is considered a new growth area for internet banks. This comes as the growth of internet banks has slowed due to regulatory measures on household loans by financial authorities. However, because managing delinquency rates is challenging and the nature of business loans involves complex procedures, it is difficult to implement 100% non-face-to-face processes, making this market one that internet banks desire but have been hesitant to enter.

However, K-Bank had previously launched the first 100% non-face-to-face apartment mortgage loan in the financial sector in 2020, and this know-how was applied to the development of this product. Manager Lee explained, "We designed this by applying the non-face-to-face apartment mortgage loan model to business owners," adding, "To launch this product, we developed an AI system in-house that digitizes business type information from the business registration certificate and compares and analyzes it with sales report data." This AI system automatically compares and verifies whether the business type and sales information reported by the customer match the documents submitted by the customer.

This also dispelled concerns about 'fraudulent loans.' Before the loan is executed, the customer's submitted contract and business registration certificate are used to understand the business type and the intended use of the loan funds. Even after loan execution, the funds are provided exclusively to the business bank account. For example, it is fundamentally impossible for a customer engaged in clothing wholesale to use a real estate-secured loan for real estate investment. This is filtered out by the AI logic designed in-house.

The main focus during the planning of the real estate-secured loan product for individual business owners was "easy, fast, and convenient." The process minimized the hassle of document submission and focused on enabling even complex loans to be obtained simply. As a result, the time from initial loan application to execution can be as short as one day.

Manager Yeo said, "Customers usually have to visit bank branches and submit many documents to get a loan, but the fact that we implemented all of this non-face-to-face makes the positive feedback from customers calling it 'convenient and innovative' very rewarding."

As a result, the product has attracted intense interest, with an average of 700 to 1,000 applications per day. As of the end of the third quarter this year, the outstanding balance of individual business loans, including real estate-secured loans, reached about 1 trillion KRW.

K-Bank recently expanded its real estate-secured loan for individual business owners to include subordinate loans. Going forward, the collateral will be expanded beyond apartments to include commercial buildings and officetels.