KakaoPay will participate in an alternative credit scoring consortium led by NH NongHyup Bank to develop a credit scoring model using MyData and payment and remittance information.

KakaoPay said on Wednesday it signed a multilateral memorandum of understanding on July 15 at NH NongHyup Bank's new building in Seodaemun district, Seoul, to establish the alternative credit scoring consortium called "NH Credit On".

The agreement was joined by KakaoPay, NH NongHyup Bank, NH NongHyup Card, NH NongHyup Capital, Korea Credit Bureau (KCB), AgileSoda, Honest AI, Crepas Solution and Korea Evaluation Information, among others.

The participants will combine non-financial information held by each company, credit scoring modelling capabilities and AI technology to develop a joint alternative credit scoring model and review ways to use it in actual financial products.

KakaoPay will be responsible for discovering alternative information based on MyData and daily financial data such as payments and remittances, and presenting ways to use it.

KCB will provide credit information including unstructured data and support the building of evaluation models. NH NongHyup Bank will oversee the consortium's operations and review the scope of use for the alternative credit scoring model and ways to link it with financial products.

NH NongHyup Card and NH NongHyup Capital will take part in selecting customer groups to which alternative credit scoring will be applied and in planning related products. AgileSoda, Honest AI, Crepas Solution and Korea Evaluation Information will support development and advancement of the model using AI and alternative credit scoring technology.

The jointly developed evaluation model will be used to assess the creditworthiness of "thin filers" such as young people entering society, university students and small business owners who have insufficient existing financial transaction information.

Kang Tae-young (강태영), head of NongHyup Bank, said, "We will achieve the practice of true inclusive finance and accelerate bank-wide AX so that no customers are excluded simply because they lack a financial history."

Shin Won-geun (신원근), CEO of KakaoPay, said, "We will use KakaoPay's daily financial data and operating experience with 'KakaoPay Score' in developing an alternative credit scoring model."