An analysis showed that pooling personal-level information scattered across several financial companies can help detect early delinquency risks by identifying changes in repayment capacity and funding strain that are difficult to capture using only existing credit data. In particular, users whose high funding strain persisted for 3 months later posted a new delinquency rate about 2.6 times higher than a group whose strain was high only temporarily.

Toss Insight, the financial management research institute of Toss, said on Monday that this was shown by its analysis of MyData users' actual financial information.

The analysis showed that the group whose high funding strain continued for 3 months had a new delinquency rate of 2.1 percent over the following 3 months. That compared with 0.8 percent for a group that showed a high level for only 1 month, about 2.6 times higher.

Toss Insight said that reviewing together information dispersed across several financial companies, including accounts, loans and cards, can help identify changes in users' funding conditions in greater detail. It said this can be used to alert users in advance or link them to consultations, helping review repayment plans and consider support measures before delinquencies occur.

The analysis also found that MyData can be used to supplement assessments of users' repayment ability when they are difficult to evaluate sufficiently based only on existing credit histories. The group with few credit-transaction records but high current repayment capacity had a new delinquency rate of 0.23 percent over the following 3 months, less than half the 0.57 percent for a comparison group with similar credit histories.

Based on this, Toss Insight said there is a need to distinguish between having an insufficient credit record and having low actual repayment ability when making assessments.

MyData users were found to already be doing business with multiple financial companies. As of the end of July this year, adult users who linked financial information to Toss MyData connected an average of about 16 financial institutions, and actual transactions were confirmed at an average of 10 of them, including deposits and loans, cards and insurance.

The analysis said competition among financial companies could also change. In the card, securities and insurance sectors, predictions of customers' future financial transactions aligned better with actual behavior when records from other financial companies were analysed together, rather than using only a firm's own transaction information.

Differences were also confirmed in card use. Among users who held 2 or more comparable cards, about 1 in 4 found that the card with the biggest benefit changed when spending histories from other card companies were analysed together. That suggests customer benefits can be increased by adjusting how existing cards are used without issuing a new card.

Toss Insight forecast that as MyData expands, the basis for competition among financial companies could shift from a simple measure of the 'amount of information held' to how useful a firm's financial services and choices are for customers.

Yoo-cheol Noh (노유철) and Tae-rin Kim (김태린), research fellows at Toss Insight, said, "MyData can explain repayment ability more accurately by gathering scattered information around individuals and can lead financial companies to compete with better services."