How does AI credit scoring technology work?
The fact that banks can now approve and disburse loans within approximately five minutes in both Taiwan and Vietnam reflects a new competitive trend in the banking industry. Competition is no longer focused solely on interest rates or product offerings, but increasingly on digital experience and technological capability. In this race, AI is emerging as a critical differentiator.
According to Cathay United Bank, its AI system leverages multidimensional data and continuously learns from users’ financial behavior. The integrated data sources include personal identification information, credit history from the Credit Information Center (CIC), transaction data, and behavioral indicators related to repayment capacity.
AI-powered loan approval in just five minutes
NFC-based chip ID card recognition technology enables identity verification to be completed quickly and accurately. AI then processes large volumes of data, compares the information against trained risk models, and generates an assessment of a customer’s creditworthiness. What differentiates AI is its ability to continuously update and refine its models, allowing the system to better reflect changes in financial behavior and economic conditions instead of relying solely on static criteria as in traditional credit evaluation systems. Reducing loan approval time not only improves the customer experience, but also helps banks optimize operational costs.
Previously manual processes, from data entry and underwriting to approval, are now largely automated. One of the biggest concerns surrounding faster loan approval is credit risk. However, according to Cathay, AI not only accelerates the process, but also strengthens risk management quality. By analyzing large datasets and identifying hidden risk patterns, AI enables banks to detect unusual signals earlier and reduce the likelihood of bad debt. Rather than relying only on historical credit records, the system also evaluates current financial trends and behavioral patterns, making credit decisions more comprehensive and dynamic.
According to Mr. Joe Liang, Chief Data and Analytics Officer at Cathay United Bank, customers can complete the entire borrowing process within just a few minutes through the digital platform, without needing to meet bank staff in person.
Vietnam - a potential market for digital lending
With high smartphone penetration and rapid digitalization, Vietnam is considered one of the most promising markets for AI-driven digital lending models. Demand for consumer loans and small personal loans continues to rise, creating the need for financial solutions that are faster, more flexible, and more secure.
According to representatives from Cathay United Bank, the long-term goal is not simply to shorten approval times, but to build a customer-centric digital financial ecosystem. AI will continue to be applied more deeply in product personalization, risk management, and the integration of financial services into everyday consumer needs.
Beyond credit scoring, Cathay United Bank views artificial intelligence as a strategic foundation for its broader operations and internal governance, extending far beyond digital lending products. Through its AI Knowledge Assistant system, the bank has established a unified access platform that helps employees retrieve knowledge, process information, and improve productivity across business operations, risk management, compliance, and operational functions.
Through its AI Knowledge Assistant system, the bank has established a unified access platform that helps employees retrieve knowledge, process information, and improve productivity across business operations, risk management, compliance, and operational functions.