KOTEC Launches Full-Scale Implementation of New Risk Management System 'RISKARE'

Launch of Machine Learning-Based Default Prediction Model Development

The Korea Technology Finance Corporation (KOTEC) announced on June 23 that it has established its own risk management philosophy, 'RISKARE,' to enhance the efficiency of SME support and strengthen the stability of risk management. The corporation stated that it will actively promote a mid- to long-term risk management roadmap centered around this philosophy.

'RISKARE' is a new concept in risk management philosophy that regards risk not simply as something to be avoided or suppressed, but as a companion to be managed and developed. In line with this philosophy, KOTEC plans to systematically apply the PDCA (Plan-Do-Check-Act) cycle principle throughout the entire risk management process to ensure feedback on results, and to further advance risk-based policy projects.

To this end, in April, KOTEC announced a research project for the 'Reconstruction of Risk Assessment and Early Warning Models,' marking the first implementation phase of turning the risk management roadmap into an actual system. This research project focuses on developing more precise and predictive risk assessment and early warning models using the latest analytical techniques.

Additionally, in May, KOTEC completed trademark registration for 'RISKARE' to raise internal and external awareness. Starting this month with the development of risk assessment and early warning models, the corporation plans to gradually establish a risk management system in phases according to the roadmap until 2027. Ultimately, KOTEC aims to build a next-generation risk management system that integrates risk prediction, alert, analysis, and response functions. In particular, the corporation plans to introduce a default prediction model that fully incorporates machine learning algorithms to further strengthen discrimination, stability, and crisis response capabilities.

Park Jusun, Executive Director of KOTEC, stated, "For KOTEC to further strengthen its role as a policy financial institution, it is essential to continuously advance our risk management system to enable accurate risk prediction and proactive response. We plan to incorporate the RISKARE philosophy throughout our organizational culture and business processes to establish an effective policy finance support system."