FSC’s latest plan is trading platform for financial dataThe government announced Monday it will allow small and mid-size financial companies access to data from public financial institutions and will create a platform for financial data to be bought and sold.
“Finance is an industry that can easily lead innovation on data, but because of regulations and the financial companies’ self-preservation practices, it failed to meet the demand for innovation,” said Financial Services Commission Chairman Choi Jong-ku on Monday. “For the financial market to include more people, utilizing various data is inevitable.
“Through more aggressive use of data, we hope to establish a more inclusive financial system that does not exclude certain groups of people and benefits the consumers, which will create financial innovation that is centered on consumers.”
According to the Financial Services Commission on Monday, starting in the second half of the year, public financial institutions including Korea Credit Information Services and the Korea Insurance Development Institute will offer their data on overall loans, loan guarantees, overdue payments, bankruptcy information, insurance payments and accidents to small and medium-size financial companies, fintech companies and research institutions.
The two organizations have data on over 35 million people. The FSC will then select 2 percent of them, or 740,000 people, at random and create a standard database to be used in creating big data analysis. The data could be used to develop an analysis tool or security system.
The FSC said these databases will be later be used to create new financial products that will meet consumer needs.
Additionally, in the first half of next year, the government will launch a platform for the private sector to buy and sell financial data.
Until now, major financial companies only provided limited information created through their own financial information. But with this platform, bigger financial companies can sell their financial data to smaller companies.
The information that will be traded on the platform will not disclose detailed personal information clients including their name, address and financial status, according to the FSC. It will either be completely deleted or replaced with pseudonyms. Financial companies that fail to protect client information under this system will face criminal charges.
The government will also allow credit bureau companies to profit through analysis and consulting of financial data. This is part of its larger plan to promote the use of big data in Korea.
According to the FSC, while credit bureau companies are leading the financial big data industry in advanced economies such as the United States and United Kingdom, Korea has limited access to new credit bureau firms.
BY LEE HO-JEONG [firstname.lastname@example.org]