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Leading commercial banks are forging partnerships with fintechs overseas to foster localization and digitization, industry officials said Wednesday.
The collective move from Korean lenders seeks to land a greater number of new customers via easy-to-use mobile platforms developed by fintech startups, key business partners in countries with higher growth potential compared to the saturated domestic market.
KEB Hana Bank has drawn 100,000 customers who borrowed a combined 100 million yuan (17 billion won) via a platform operated by Ant Financial, a fintech affiliate of Alibaba, China's e-commerce giant.
This is in line with the bank's objective to offer financial services to 1 billion users of Alipay, Alibaba's payment platform, including taking out small, short-term loans.
"Landing the new 100,000 customers in China only four months after we teamed up with Ant Financial is quite a pleasant surprise. We think the joint project will also help us to use Alipay user consumption pattern analysis data in assessing credit risks and develop more financial products that best meet customers' needs there," a KEB Hana official said.
KEB Hana plans to expand its presence further in Indonesia, a key area of growth where its corporate entity PT Bank KEB Hana Indonesia is established.
PT Bank KEB Hana Indonesia signed a share subscription agreement with LINE Financial Asia in October 2018 to strengthen Hana's digital banking there by fully capitalizing on LINE's strong brand recognition, user-heavy platform and rich content.
Shinhan Bank India has forged alliances with Mynd Solutions, a tech service provider in India, to strengthen its foothold in the nation.
The key service available on the digital platform is what the bank calls a "digital factoring loan," which is digitally processed operating fund financing.
A type of debtor finance, factoring refers to a financial transaction in which a business sells its accounts receivable at a discount to a third party called a factor.
Upon launch of the service in January, Shinhan extended new loans worth $1 million in less than five days. In September, the outstanding balance of the loans stood at $80.8 million.
"We expect the service would help us reach broader customer base, strengthening our retail business in India. The operating cost-reducing digital service is also expected to help us with diversified business portfolio management," a Shinhan official said.
KB Kookmin Bank's Liiv, a comprehensive, cloud-based digital platform, provides service developed by Cambodian mobile payment app Pi Pay.
The 90,000 users of the localized version of the platform Liiv KB Cambodia will be able to enjoy enhanced customer service including easy-to-use payment.
Woori Bank sold $14 million in auto loans in about two months after it introduced in August the product jointly developed by a fintech subsidiary of China's Pingan Group.
"The strategic partnership with the Chinese tech giant helps our localized digitization service. The market is expected to grow in the coming months," a Woori official said.
