The Ownership of My Data Belongs to Me
With a simple question like "Would you like to agree to the use and collection of your personal information?" companies gain the right to collect and utilize individuals' data. Similar to how Netflix analyzes what users watch and offers tailored content recommendations based on that data, the processed data remains the property of Netflix. This phenomenon was also prevalent in the financial sector. Each financial institution held onto its data without sharing it with others, making it difficult for consumers to aggregate scattered information from various institutions. Consequently, comparing financial products efficiently and obtaining the lowest interest rate for credit loans often required in-person visits to banks. The advent of open banking in October 2019 allowed users to view all commercial bank accounts in one place, but data such as credit card transactions and insurance information remained difficult to access.
In August 2020, the Data 3 Laws, including amendments to the Credit Information Act, established the foundation for claiming, "I am the owner of my data." The amended Credit Information Act introduced the "Right to Request Personal Credit Information Transfer." This essentially enabled individuals to request that their data be sent to designated third parties for analysis and recommendation.
The Data 3 Laws
Comprising amendments to the Personal Information Protection Act, the Information and Communication Network Act, and the Credit Information Act, the Data 3 Laws were proposed to prevent duplicate regulations and expand the scope for individuals and companies to use information. The laws were passed in January 2020 and came into effect in August of the same year. Two notable aspects of the Data 3 Laws are as follows:
1. Enhanced Personal Information Protection: Differentiating personal information, pseudonymous information, and anonymous information, the laws provide a framework for safeguarding specific categories of personal information. While pseudonymous and anonymous information can be utilized by companies, only government-designated institutions can combine such information. Furthermore, if information that can potentially identify individuals is not discarded after being pseudonymized or anonymized, more severe penalties will be imposed.
2. Introduction of MyData: MyData refers to a series of processes wherein individuals actively manage and utilize their data. The "Right to Request Personal Credit Information Transfer" included in the amended Credit Information Act can be considered a form of MyData activity.
The Dawn of the MyData Era
With the introduction of MyData, the "MyData industry" or credit information management gained attention. Third parties that receive information from individuals can manage the data, analyze it, and provide personalized recommendations based on it.
However, not all information can be shared. The information that can be requested includes financial transaction details, national and local tax payment information, payments for the "four major insurance" types, and communication fee payments. Moreover, not just anyone can request this information. The government announced that the MyData business will be carried out under a "permission-based" system. This means that only companies designated by the government can conduct MyData businesses. As of January 19, 2021, 21 financial institutions including banks, credit card companies, financial investment companies, savings banks, and fintech companies received preliminary licenses for MyData.
What Are the Benefits of the MyData Business?
1. All financial information can be viewed in one place: Instead of visiting individual institutions like banks, credit card companies, and financial investment firms or logging into various websites, individuals can easily check their overall financial status in one place.
2. Analysis of credit and assets becomes possible: With data previously scattered, it was challenging to grasp one's credit and assets at a glance or conduct in-depth analysis. The "Right to Request Personal Credit Information Transfer" allows individuals to request third parties to provide reports on their credit and asset status.
3. Customized financial products can be received: MyData businesses have more opportunities to offer personalized financial products based on provided financial information. Particularly, with access to a broader range of individual information across various industries, there is potential to improve the efficiency of financial product comparisons.
4. Expectation for the advancement of the financial industry: Previously, commercial banks, which held the most customer data, had an advantage in recommending credit and asset management or financial products to customers. However, with the introduction of the MyData business, other financial institutions can also enter the scene, leading to a positive competition for individual data. This may result in innovative financial products that were previously unimaginable.
Do Similar Concepts Exist Abroad?
The MyData business is a global trend, with the European Union (EU) being a frontrunner in this area. In 2016, the EU established the General Data Protection Regulation (GDPR), which grants individuals rights to control, access, and delete their own information. Just like South Korea, GDPR includes the "Right to Request Data Transfer," requiring institutions (including financial institutions) to provide data to third parties in a format that can be widely utilized.
Additionally, the UK introduced its own open banking standards in addition to GDPR. In 2011, the UK decided to apply MyData to all industries and introduced the open banking system in 2016, requiring third parties to provide information not only about customers but also about financial products through APIs. This allowed customers to easily compare financial products through services provided by third parties without the need to individually confirm complex financial product information.
Are Asset Management Apps Provided by Fintech Companies Already Serving This Purpose?
Yes, that's correct. As a result, consumers may not immediately perceive significant changes. However, the way companies gather information is expected to undergo a significant transformation. Currently, companies utilize a "scraping system" to collect information. Fintech firms access customer data by logging in to bank websites using user IDs, passwords, or public key certificates on behalf of customers. When the MyData business is implemented, data will need to be collected using APIs instead of the scraping system. To achieve this, the MyData policy mandates that financial institutions independently develop and disclose their API systems. As a wider variety of information is shared, the credit and asset management or financial product recommendation services that customers receive are expected to become more sophisticated.