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  • Credit
  • Innovation
  • Japan

Payments... and Now a Credit Scoring Tool for Line

FACTS

  • Line started out as an instant messaging platform, and make further progress into becoming a FinTech. They launched a payment service in the end of 2018 and just unveiled a credit scoring tool based on the data they are able to collect via their messaging service.
  • Line Score is available for Line customers through Line Credit Corporation, Line Financial Corporation’s credit-focused subsidiary (financial arm of Line Corporation).
  • Partners:
    • Mizuho Bank: first financial partner when they launched their wallet.
    • Orico: AI specialist in charge of technical aspects and processing Line’s huge user data entries.
  • Besides scoring, Line Score will provide the users with access to special offers, discounts and other customised benefits.
  • Line specifies that credit score assessments are subjected to user consent, and so is the process of sharing data with partner companies.

LINE : 80 million active users each month

CHALLENGES

  • Valuing data. Line explains that this tool will not only rely on their users’ financial data but also leverage data about their online connectivity and on a form that will need to be filled out.
  • Customising scoring processes. Line and Orico are praising an alternative scoring models, more convenient and adapted to the user’s actual behaviours.
  • Adding value to scoring procedures. In addition to their scores, the users have access to different customised offers enabling them to benefit from this data analysis process.

MARKET PERSPECTIVE

  • Line is already planning other services for their scoring tool. They would intend to provide scoring data to third parties through APIs for agreed upon uses: a way to further monetise their customer data.
  • They also follow in other industry players’ footsteps. In China, for instance, the search engine Baidu, e-commerce giant Alibaba (Sesame Credit) and Tencent (WeChat Pay Points) have implemented scoring systems, too.
  • Line’s strategy aims at diversifying financial services based on processing user data. Their model can be compared to WeChat’s strategy, since their messaging offer also comes with a set of financial services.