Amid growing concerns over the practice of "cherry-picking" high-quality customers by internet banks, Toss Bank has taken steps to improve its operations by hiring a strategy expert from Coupang. With the average credit score of its borrowers being higher than that of traditional banks, Toss Bank faces the challenge of expanding loans for low and middle credit borrowers while balancing profitability and soundness.
According to the financial sector on May 11, Toss Bank has established a new position for Chief Strategy Officer and appointed Im Seung-hyun to the role.
The creation of this position aims to accelerate the company’s overall strategy and strengthen its role as a strategic hub directly connected to various business departments. Born in 1985, Im has extensive experience in strategic planning at various platform companies, including Coupang and Deloitte Consulting.
Im is expected to play a central role in strategy and operations to achieve common goals based on a deep understanding of the business and execution capabilities.
He is also anticipated to prioritize the expansion of loans for low and middle credit borrowers. The proportion of low and middle credit borrowers at internet banks has increased from 30% to 32% this year. On May 3, Kim Yong-beom, head of the policy office, criticized the practice of cherry-picking, stating on Facebook, "Cherry-picking is not the mission of internet banks."
As of the end of last year, Toss Bank's loans to low and middle credit borrowers accounted for 34.9%, exceeding the government’s benchmark of 30%. However, the reality remains that loans are primarily granted to high-credit borrowers. According to the Korea Bankers Association, the average credit score of Toss Bank's general credit loan customers last month was 930, higher than that of Shinhan Bank (911), Hana Bank (911), and Woori Bank (928), based on Korea Credit Bureau (KCB) standards.
Thus, reducing loans to high-credit borrowers or increasing loans to low-credit borrowers will likely be Im's first task in response to government demands. To increase loans for low and middle credit borrowers while maintaining soundness, enhancing alternative credit assessment models (CSS) will be necessary. Im is expected to leverage his experience in data to identify suitable low and middle credit borrowers.
Additionally, to support the continued expansion of loans for low and middle credit borrowers, it will be essential to back this with secured loans and loans to large corporations. Therefore, diversifying mortgage products and personal business loans will also be key responsibilities for Im this year.
Furthermore, he will need to explore ways to increase non-interest income and seek new business opportunities, such as stablecoins, to support reduced lending. Plans to enter the fund direct sales market, as well as the trust and retirement pension markets, and to develop financial services for senior customers and expand guarantee-based loans, will be additional tasks for Im.
A financial industry source stated, "As we enter the fifth year of operations, we have reached an important turning point," adding, "The creation of this position is intended to accelerate efforts in inclusive finance, non-interest income, new business, and product partnerships."
* This article has been translated by AI.
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