Shinhan Financial Group said Thursday that it has launched a comprehensive online auto financing platform that allows users to gain access to the firm’s loan and lease services.
Shinhan’s customers can now check their credit limits and compare auto finance products or monthly installment plans tied to loans, leases and rentals via the platform dubbed “My Car.” The platform is available on its website and in app form.
“My Car” was created by merging two separate auto financing platforms operated by the banking group’s flagship unit Shinhan Bank and credit card issuer Shinhan Card.
According to Shinhan, the platform reduces the chances of credit denial by allowing users to apply for multiple products in one place.
An online shopping mall for car gadgets and accessories, information related to car maintenance and car price comparison will be provided via the platform as well.
Shinhan’s decision to bolster its auto financing platform comes as local institutions, especially card issuers, have started to eye auto debit and loan businesses, in an attempt to diversify their revenue sources. Card issuers have been struggling to make profits solely from their traditional business models focused on annual fees and credit card loans.
Five card issuers here -- Shinhan, Samsung, KB Kookmin, Woori and Lotte -- posted a combined 132.4 billion won ($115.8 million) in net profit for the first-half of the year, up 11.3 percent on-year, from their auto debit and financing business alone.
Several, including Samsung Card and Shinhan have been designing and launching apps exclusively for auto financing and Hana Card, card issuing unit of Hana Financial Group plans to enter the market by the first-quarter of next year.
With the policymaking Financial Supervisory Service having decided to increase the industry-required “leverage ratio” -- the ratio of a company’s equity to debt -- from 6 to 8 in September, giving card issuers more room to expand their businesses, the local auto financing market is projected further grow, according to onlookers. The new leverage ratio rule has taken effect on Oct. 1.
By Jung Min-kyung (email@example.com)