Financial Authorities: "Loan Companies Must Also Establish MyData Transmission Systems"

"Need for Establishing Computerized Systems" Legal Interpretation

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[Asia Economy Reporter Kim Hyo-jin] Financial authorities have interpreted that loan companies must also establish systems for transmitting consumer credit information in line with the implementation of the MyData (Personal Credit Information Management) system.

According to financial authorities on the 5th, the Financial Services Commission recently responded with this interpretation to requests for legal interpretation submitted by some loan companies.

MyData is a system that allows financial consumers to comprehensively understand and manage their credit information scattered across financial companies, such as financial product subscriptions and asset details. Since consumers receive specialized information management, asset management, and credit management services tailored to themselves, it is also called a "financial secretary" or "Pocket Finance." It also signifies a shift in the initiative of financial consumption from financial companies to consumers.

Accordingly, financial companies must send relevant information to MyData operators upon consumer request. The "credit information providers and users," as stipulated in the Credit Information Act that underpins MyData, include loan providers registered with the Financial Services Commission.

The Financial Services Commission explained, "All registered loan companies are judged to be required to build computer systems capable of transmitting credit information to MyData operators either directly or through intermediaries when the credit information subject (consumer) requests transmission."

As a result, it is expected that integrated analysis of practical credit information will become possible, encompassing not only general financial information such as bank account information, card payment information, insurance payment information, and securities investment information but also loan finance usage information, which is at the fringe of the regulated financial sector.

Financial authorities are conducting screening procedures for MyData business licensing. In August, 63 companies applied for preliminary approval, including major banks, card companies, insurance companies, and securities firms affiliated with leading financial groups. The financial authorities plan to prioritize screening about 40 companies that have been providing services similar to MyData to allow them to start operations.

Earlier, financial authorities revised banking supervision regulations to allow banks to hold financial sector MyData companies as subsidiaries. With the participation of big tech companies such as Naver and Kakao and fintech companies, competition for MyData services inside and outside the financial sector is intensifying.