Financial Authorities "Establish Fair Data Trading Principles Between Big Tech and Financial Companies"

Launch of Digital Finance Council with Participation of Financial Companies and Big Tech

Son Byung-du, Vice Chairman of the Financial Services Commission, is delivering the opening remarks at the 1st Digital Finance Council on the 10th.

[Asia Economy Reporter Kim Hyo-jin] On the 10th, financial authorities announced their stance to create a fair data trading environment between big tech companies (large information and communication companies) led by giant platforms and financial companies.

Son Byung-du, Vice Chairman of the Financial Services Commission, said at the 1st Digital Finance Council meeting held online in the afternoon, "(For digital financial innovation) a sound competitive order among market participants must be established," adding, "We will prepare institutional measures to create a fair competitive environment between giant platform operators and financial companies."

Vice Chairman Son added, "We will also deeply address the principles of data sharing among market participants," and "We will discuss principles and regulatory methods that can promote desirable collaboration and competition between platform operators and existing financial businesses."

Vice Chairman Son's remarks are interpreted as an explanation regarding controversies that financial companies face reverse discrimination due to regulatory gaps and institutional loopholes concerning big tech companies such as Naver and Kakao, whose entry into the financial industry and data trading and integration are becoming increasingly active.

The chairmen of the five major financial holding companies raised these issues when they met with Financial Services Commission Chairman Eun Sung-soo in July. The concerns include the limited information sharing among affiliates within holding companies, whereas big tech companies can easily provide information to their affiliates, and the unfair scope of data exchange between financial companies and big tech in the MyData industry (personal credit management business).

In response to these criticisms, financial authorities have maintained the principle of "applying the same regulations to the same functions." Vice Chairman Son mentioned this principle again at this meeting. However, he said, "We will improve the system in a direction that can promote financial innovation."

Reaffirmation of the 'Same Function, Same Regulation' Principle
But with the Premise of 'Promoting Innovation'

Vice Chairman Son also stated, "We must continue regulatory improvement efforts to promote financial innovation in the digital era," and pointed out, "Regressive regulatory reinforcement that hinders digital financial innovation is no longer possible." He further revealed the plan to "thoroughly identify and boldly improve regulations that do not fit the changes in the digital environment."

The Digital Finance Council, launched with this meeting as a starting point, is a body for in-depth discussion of various topics related to financial innovation in the digital finance era, involving financial authorities, big tech and fintech (financial technology) experts, and related organizations.

From the financial authorities, Vice Chairman Son and Kim Geun-ik, Senior Deputy Governor of the Financial Supervisory Service, participate. From the financial sector, Han Dong-hwan, Vice President of Kookmin Bank, Jung Joong-ho, Director of Hana Financial Research Institute, and Cho Young-seo, Vice President of Shinhan DS, join. Participants from the big tech and fintech fields include Professor Kim Yong-jin of Sogang University, Ryu Young-jun, CEO of Kakao Pay, and Choi In-hyuk, CEO of Naver Financial.

The Digital Finance Council plans to hold meetings every 2 to 4 weeks and announce practical alternatives for various tasks by the end of the year.