Fintechs, Hyundai to launch joint online bank

[Courtesy of Lunit]

A South Korean joint consortium of fintech startups, including Lunit Inc., and major non-life insurer Hyundai Marine & Fire Insurance Co. plans to launch what would be the fourth online bank available in the country after KakaoBank Corp., Toss Bank and K bank.

The consortium, called U-Bank, announced Monday that it recently began preparations for preliminary approval. “We will offer more inclusive financial services, especially for the elderly, small and medium-sized enterprises (SMEs), and foreigners,” an official from the consortium said.

U-Bank showed its commitment to offering services tailored to the digital literacy of elderly customers, who often find it difficult to use financial programs on digital devices. The consortium also plans to support policy finance for SMEs, develop alternative credit rating models, and provide remote financial services.

Taking the growing number of non-Korean residents in the country into account, U-Bank will develop a novel financial program designed to appeal to foreign residents, who numbered nearly 920,000 as of 2023.

The consortium also focuses on mid-range interest loans, one of the common services offered by Internet banks. A credit rating model developed by LENDIT, a fintech participating in the consortium, is expected to make credit loans more accessible to broader borrowers’ groups.

LENDIT has developed an alternative credit rating model and a fully contactless platform by tapping into big data analysis and machine learning. Over the nine years since it was founded in 2015, the startup has amassed 15 million loan applications with 2.7 million approvals.