In the context of the Vietnamese banking and financial system gradually shifting strongly towards digitalization and international integration, improving credit risk management capacity, ensuring information transparency and increasing credit access for people has become an inevitable requirement.
As a national credit information agency, the National Credit Information Center of Vietnam (CIC) has proactively innovated and built a CB 2.0 physical credit scoring model, officially launched in April 2021, to keep up with international trends, better serving the goals of the Government, the State Bank, credit institutions (CIs) and the people.
The development and operation of the CB 2.0 model also clearly demonstrates the role of CIC in accompanying the implementation of major national orientations. The CB 2.0 model is a step to concretize the digital transformation strategy of the banking industry to 2025, with a vision to 2030 (Decision No. 810/QD-NHNN), and at the same time contributes significantly to the implementation of the National Comprehensive Financial Strategy to 2025, with a vision to 2030 (Decision No. 149/QD-TTg), promoting the ability to access formal finance for all classes of people. The model is also one of the key tasks in implementing the CIC Development Project to 2030 (Decision No. 689/QD-NHNN), aiming to build CIC into a modern, proactive, and diversified credit information institution for products and services.
In particular, the CB 2.0 personal credit scoring model is the first platform to aim at strategic goals: converting CIC personal credit score into a national, popular and mass credit score - where all Vietnamese citizens can own, monitor and improve their credit score in a transparent, fair and sustainable manner.
Benefits of CB 2.0 personal credit score for State Bank, credit institutions and people
For the State Bank
The CB 2.0 personal credit score plays a powerful tool for monitoring and orienting macro credit policies. With the ability to comprehensively score nearly 56 million customers and be updated regularly, the CB 2.0 individual credit scoring model helps SBV closely monitor credit quality in the system, while supporting credit institutions in complying with Basel II and III requirements on the use of independent internal scoring models.
For credit institutions
Improve credit appraisal efficiency: Scoring and rating indexes provide additional information to support credit officers in making accurate and quick decisions, especially in the fast, online consumer lending model.
Flexible, cost-effective: CB 2.0 physical credit score integrated in products such as S11A/S11T, K11, S40... adds many value-added features, but still keeps the product price unchanged.
Support for the implementation of Basel II/III - Internal Rating (IRB): CB 2.0 scores can be flexibly integrated in the IRB implementation roadmap at credit institutions under many scenarios:
- Use as an input filter for new customers;
- Add input variation in IRB model;
- As a reference index (benchmark) to verify internal model results;
- As an early warning tool for macro credit risks and early warning.
For the people
Proactively access credit: Customers with good credit scores will easily access capital from banks and financial companies, with more preferential interest rates and conditions.
Understand and improve credit records: Customers can look up their credit scores from CIC's website or customer connection application, thereby having a reasonable direction to adjust financial behavior. Thanks to the detailed explanation of why the score is high/low, CIC can easily advise and accompany customers to improve credit capacity.
Accompanying the digital economy: The popularization of credit scores helps people gradually form "electronic financial records", serving diverse needs from loans, studying abroad, applying for jobs to settling down.
Outstanding capabilities of the 2.0 personal credit scoring model
One of the outstanding advantages that makes the CB 2.0 model strong is that CIC owns the largest, most complete and updated credit data warehouse in the Vietnamese banking industry - covering nearly 56 million individual customers, collected from 125 credit institutions, foreign bank branches, 1,200 people's credit funds, and other voluntary organizations nationwide. This abundant, continuous and in-depth data warehouse is the core foundation to help improve the quality of the model, ensuring comprehensiveness, accuracy and the ability to serve many different types of applications.
superior to the CB 1.0 model
The 2.0 individual credit scoring model is built on the basis of cooperation between CIC and NICE Group - one of the three leading credit information companies in Korea - and is the successor to the comprehensive upgrade of the CB 1.0 Model launched in 2015.
Large and comprehensive database: The 2.0 individual credit scoring model is built and scored based on the data set of all customers nationwide, compared to just over 10 million customers mainly in Hanoi and Ho Chi Minh City in the CB 1.0 model.
High inspection efficiency:
GINI Index: ~82%
This is a good level, reflecting the ability of the model to clearly distinguish between the group of customers who are able to repay debts on time and the group of customers at risk of bankruptcy.
Distinguishing index (KS - Kolmogorov-Smirnov): ~72%
The index is at a very good level, exceeding the minimum practice threshold of 30 40%
Model stability index (PSI - Population Stability Index): < 0.1
Showing a stable model, not fluctuating over time, used well in practice.
Prohibiting ratings from all people, not excluding: If the CB 1.0 model only scores about the first 8 grades, the CB 2.0 model will rank all customers according to the international 10-class standard, including the "thin-file" group (customer without credit history) - this group is applied tomachine Learning technology.
Rich and logical variables: From 820 variables, candidates are carefully selected through many rounds of processing, ensuring that the model accurately reflects actual credit behavior.
Stability and high updates: Scoring regularly and periodically (rather than quarterly like CB 1.0), using powerful, easy-to-adjust R-CLIPS software.
Clear and transparent explanation: The code for explaining, classifying and recommending behaviors helps explain a reasonable and clear way of calculating scores - which CB 1.0 has not applied.
Compared to international organizations
Technology autonomy: experts from CIC and NICE Group cooperate, directly building and operating the model, ensuring information security and easy adjustment according to domestic requirements.
In accordance with the Vietnamese market: Unlike development models in foreign markets, CB 2.0 is a product specifically designed according to the characteristics of the Vietnamese market, based on standardised big data according to Circular 03/NHNN.
Orientation for developing CIC points to become a national credit point
CB 2.0 Global Credit Score is the starting point for the long-term strategy of making CIC a "national credit point, popular with all people". To realize this vision, CIC has been focusing on the following main development orientations:
Invest in information technology: Ensure a continuous, stable system, capable of tracing CIC points anytime, anywhere.
Survey, accompany credit institutions: Continuously organize periodic surveys, collect opinions from banks and financial companies on scoring needs, thereby updating more information outside the industry, adjusting models and products to suit business practices, thereby ensuring that CIC's credit scoring model is not only " theoretically suitable" but also "easy to use in practice".
Applying modern technology: Applying machine Learning, AI, big data technology in building personalized and "explainable" scoring models...
Strengthening the application of alternative data: CIC actively refers and applies international experience in using non-traditional data such as electricity and water bills, phones, online consumption behavior... to assess customers without credit history, expanding credit access opportunities for this group of people.
Cooperate with global partners: Continue to expand cooperation with reputable credit rating organizations and companies in the world to update technology, data and standardize according to international practices.
Not only a technical step forward, CB 2.0 also opens a new era - where credit points become an essential "digital asset" of every citizen, where every citizen can control, protect and enhance their financial reputation in a transparent and fair manner.
