Fintech Big Brother law opposed by the Bank of Korea

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Fintech Big Brother law opposed by the Bank of Korea

Published: 17 Feb. 2021, 15:47

The Bank of Korea office in central Seoul. [YONHAP]

The Bank of Korea released a statement Wednesday opposing an amendment to a law on electronic financial transactions pursued by the Financial Services Commission (FSC).

The central bank said the revision includes multiple articles that could violate the personal information protection law and argued those sections should be deleted.

The amendment was proposed last year to make all transactions go through a designated clearing organization, in this case the Korea Financial Telecommunications & Clearings Institute (KFTC), to ensure transparency in financial transactions at big tech companies like Naver and Kakao.

The amendment was also at the center of FSC's plans to innovate digital finance.

"We, as the central bank in charge of payment and settlement systems, oppose to the systems being used as a means of [monitoring] by the Big Brother," the bank said in a statement.

If the bill passes, the FSC can essentially collect all transaction data of big tech companies through KFTC, the bank said.

The revision mandates tech companies doing finance to offer all transaction data to the KFTC, or else the companies will be fined. Data offered to KFTC is not subject to local personal information protection law.

The FSC will have access to data collected by the KFTC as the amendment will give the financial regulator the right to oversee and regulate the KFTC, according to the central bank.

"The FSC argues that the collection of data is necessary to protect consumers and make transactions more transparent, but it is like installing CCTVs in every home to prevent family violence," the central bank said in a statement.

The central bank further added that there is no government in the world looking into the internal transaction data of financial tech companies.

The bank revealed results of research by two law firms on whether the amendment poses Big Brother risks. Both of the law firms said that being able to collect unnecessarily large amount of information could be a problem.

The central bank and the FSC has been fighting over the bill since it was proposed last November but have failed to reach a consensus.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]