KakaoBank vows to boost digital finance cooperation with Mongolia

KakaoBank will expand its cooperation with Mongolia to promote digital finance innovation and improve access to financial services, CEO Yun Ho-young said during his visit to Ulaanbaatar as part of the economic delegation accompanying President Lee Jae Myung on his state visit.

KakaoBank discussed measures to expand cooperation with Mongolia’s MCS Group as well as with local financial institutions and the government on digital finance, the internet-only bank said on Friday.

The bank signed a term sheet with MCS Group with plans to invest in M Bank this year, without specifying the amount. M Bank is Mongolia’s only fully digital bank, launched by MCS Group in 2022. The two companies will cooperate in areas including the advancement of credit assessment systems and the establishment of a global digital banking network.

In April, KakaoBank announced to expand its global footprint into Mongolia as its third overseas market after Indonesia and Thailand, noting its plans to transplant its alternative credit valuation model to local financial institutions in Mongolia.

“Ten years ago, Korea created a digital finance environment that enabled easy and convenient finance services for everyone through the government’s introduction of internet-only banks,” Yun said in a press release. He added that KakaoBank has also leveraged its self-developed alternative credit assessment model to provide loans to borrowers with low to medium credit ratings.

“Mongolia is a market with significant potential for the AI finance industry considering, given its young population and well-established digital infrastructure. Through strategic cooperation with MCS Group, we will enhance M Bank’s credit assessment system and jointly develop alternative credit assessment models utilizing nonfinancial data to create an AI finance ecosystem where both countries can grow together,” Yun said.

BY JIN MIN-JI [[email protected]]