Passage of three data bills is hailed by FSCWith the passage of the so-called three data bills on Thursday, the use of personal data will be easier in Korea, which is expected to bring significant improvements to the nation’s finance industry.
The Financial Services Commission (FSC) welcomed the passage of the bills, saying it will “accelerate the finance industry’s digital transformation.”
“It made a legal base for the finance industry’s utilization of big data, and it also made a suitable environment for new industry players like MyData,” the FSC said Thursday in a statement.
The National Assembly passed revised versions of three data-related bills - the Personal Information Protection Act, Information and Communications Network Act and Protection of Credit Information Act - relaxing regulations on the use of personal data including credit ratings. The bills have been pending in the Assembly for more than a year.
With the revisions, a business entity is now allowed to utilize pseudonymized personal data without getting the permission from the subject for commercial statistics, study and for public goods purposes. Before, a complicated process was required to use personal data.
Pseudonymized personal data removes information that can trace data back to an individual. It contains enough information to contribute to big data algorithms.
The changes to the laws are also expected to allow new players into Korea such as MyData-type companies. MyData companies are third-party entities that collect and analyze personal financial data that is scattered around diverse financial institutions upon a client’s order. Previously, each financial entity claimed exclusive rights to the pieces of information obtained from the client. “MyData operators can help clients better manage their personal data and thus recommend better customized finance products and consultations,” the FSC said.
The financial authority said the entry barrier for MyData businesses would be lowered.
Shinhan Financial Group predicted fintech companies like Kakao Pay, NHN Payco, Bank Salad and Toss will be among the first applicants for such new business opportunities.
“MyData operators can collect one’s data into one place and recommend more customized services based on its algorithm,” said Kim Soo-hyun, a researcher at Shinhan Financial Group.
The changes in the law will even help people with low credit ratings.
Before, people without regular incomes or savings had low credit ratings. Now, with the FSC’s plan to implement what’s called a “non-financial credit bureau,” their credit ratings are likely to increase because their history of paying phone bills, electricity and water bills will be taken into consideration.
“With enough accumulation of data, some 11 million young men and housewives and some 6.6 million self-employed people will receive higher credit ratings,” the FSC said.
The new data-related laws will go into effect as early as July.
Intentional re-identification of pseudonymized personal data is prohibited and can lead to a fine of a maximum 3 percent of the business entity’s yearly revenue. Korea’s bio industry, which has chafed at the strict regulations on the use of personal medical data, welcomed the changes. “The three data bills are the basis of the bio industry’s future,” said the Korea Biotechnology Industry Organization in a statement Friday. “The utilization of big data will ultimately elevate the people’s health and welfare through more personalized care.”
BY JIN EUN-SOO [email@example.com]