CIMBT eyes social media for risk
Thai Bank (CIMBT) is in talks with potential foreign business partners to help the bank leverage social media data to determine retail borrower creditworthiness.
The tentative partners are experts in the new technology and social lending, said Adisorn Sermchaiwong, senior executive vice-president at CIMBT. The bank would initially use social network analysis for credit risk modelling, called “social lending” by CIMBT.
Social media gives lenders an insight into how loan applicants spend and their behaviour and lifestyle, as well as financial based-information. Credit checks via social media also open opportunities for those with little or no financial history to access bank loans.
He said the bank would test out its social lending model in the Bank of Thailand’s regulatory sandbox to assure the technology’s stability and accuracy after it agrees on a partnership.
The period in the regulatory sandbox is expected to take six months to a year, said Mr Adisorn.
For the initial stage, it would offer its social lending model as a pilot project to select customers. CIMBT is still considering which social media — Facebook, Instagram, Twitter — it would use for lending analysis, he said.
“Status posts on social media, both messages and pictures, demonstrates user characteristics. With data analytics, it could reflect a consumer’s debt payment ability and his or her willingness to pay,” said Mr Adisorn.
“For instance, a person who always travels abroad would be classified as upper income. A guy who always checks in at his office is seen to be responsible. A person who always posts a painful status on lottery day is seen to love risk-taking. Such behaviours could help in analysing the debt-service capability of loan applicants.”
Moreover, social lending would facilitate the bank’s digital lending expansion, he said.
The bank offers digital lending via its mobile banking app, meant to offer customers more convenience, simplicity, and speedier loan approval. CIMBT plans to use information-based lending together with a credit scoring system to analyse retail loans on the mobile banking app.
CIMBT shares closed yesterday on the SET at 0.88 baht, down two satang, in trade worth 1.15 million baht.