A private financial think tank has recommended banks to adopt a personality test in evaluating the credit rating of loan borrowers and their repayment capacity.

The KB Financial Group Research Institute said in a report on Monday that by using psychological analytic techniques and big data, one can measure how consistently loan borrowers pay back their debts.

Under this system, loan applicants should first answer a questionnaire by computer or smartphone, which can then calculates a credit rating.

The report cited the Visual DNA system, developed by a U.K. company to prove a link between a person’s psychological traits and their financial behavior.

MasterCard’s consultation paper for 2014 said that by adopting the Visual DNA system in its loan approval process, the company’s default rate decreased by 23 percent.

“Not everyone has a credit score, but everyone has a personality,” says Visual DNA’s official website.

The demo questionnaire provided on the website starts off with a number of instinctive quizzes, such as “how do you feel when you are alone?” or “what kind of role would you play in a theatrical play?”

In the later part, the questions become more fact-driven, asking details such as the respondent’s mobile carrier, bank and family connections.

The 15-minute test evaluates the subject in five criteria: neuroticism, extraversion, agreeableness, conscientiousness and openness to experience.

“About half of the world’s adults have no banking transactions and only 1 in 10 people in underdeveloped countries have a credit score,” said Kim Hee-min, researcher at KB’s think tank.

“If a simple personality test can help them prove their repayment capacity, these people will be able to take small-sum loans.”

The system offers not only loan assessments to the lower financial bracket but also a means to combine information technology with finance ― a trend referred to as fintech.

“For instance, Facebook has evaluated a person’s repayment capacity by referring to his or her reputation, past overdue expenses and phone call details,” the researcher said.

“Though this may lead to privacy disputes, it proved that a person’s credit rating could be approached through a broader perspective.”

By Bae Hyun-jung (tellme@heraldcorp.com)