Fintech and big data will be used to evaluate loan applications.
Hang Seng Bank will replace old-fashioned banking practices and use big data and fintech instead to assess the creditworthiness of borrowers pursuing online loan applications, reports South China Morning Post.
The bank will start accepting online applications for personal loans without requiring borrowers to provide any proof of income or address by Q4. The service will be available to existing bank customers.
The move is in line with guidelines issued by the Hong Kong Monetary Authority (HKMA) prescribing how banks can use fintech in personal lending. Instead of demanding documentary proof from the borrower, banks may adopt technology-powered credit risk management technologies like consumer behavioural analytics to assess credit risk.
“The new guidelines will enable banks to be more innovative and adopt more financial technology in personal lending business in order to improve digital customer experience. This is also a major development in banking supervision,” Arthur Yuen, deputy chief executive of the HKMA said in an earlier statement.
Hang Seng is also mulling the option of applying for a virtual banking license from the HKMA.
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