"Worries Become Reality"... Samsung Card Faces Setback in Critical MyData Business

Major Shareholder Samsung Life Receives Institutional Warning
Prohibited from Entering Licensed Businesses for 1 Year
MyData Business Faces Suspension Risk

[Asia Economy Reporter Ki Ha-young] Concerns have become reality. Samsung Card's MyData business is on the verge of a complete halt. This is due to its major shareholder, Samsung Life Insurance, receiving a severe disciplinary action called an 'institutional warning.' In the rapidly changing payment environment caused by the entry of big tech companies into the financial market, Samsung Card, which had pinned its future growth on MyData, is now facing an urgent crisis.

According to financial authorities and the card industry on the 4th, the Financial Supervisory Service's Disciplinary Committee held its 30th meeting the day before and decided on a severe disciplinary action, an institutional warning, against Samsung Life Insurance. The final confirmation of the disciplinary measures will be made through the approval of the Financial Supervisory Service Commissioner or the resolution of the Financial Services Commission, depending on the target of the action. According to the Credit Information Business Supervision Regulations, if a major shareholder receives an institutional warning or higher, the company cannot enter new businesses requiring permits or licenses for one year. Due to Samsung Life Insurance's institutional warning, Samsung Card will face difficulties in entering the MyData business, which requires such permits.

MyData is a business that collects personal credit information scattered across banks, insurance companies, and card companies into one place to provide customized financial services. Facing profitability deterioration due to reduced merchant fees, card companies are rushing to diversify their businesses by entering this promising future market. Starting next year, a permit from financial authorities is required to operate a MyData business, and a total of 35 financial companies and fintech firms participated in the first round of permit screening. Without a permit, current services can only be maintained until February next year. Financial authorities are currently conducting preliminary permit reviews for MyData and plan to announce the results early next year.

With Samsung Life Insurance receiving a severe disciplinary action, Samsung Card has no choice but to temporarily suspend MyData-related services after February next year. The administrative process to finalize Samsung Life Insurance's institutional warning will take at least 2 to 3 months, but the first round of MyData permit screening will have already ended by then. The Financial Services Commission plans to support partnerships with other MyData operators to provide services similar to the current ones, but this is only a temporary measure.

Recently, Samsung Card added an 'Assets' menu to its mobile application 'Samsung Card MyHome,' expanding its integrated asset inquiry service that allows users to view financial assets such as accounts, cards, cash receipts, loans, and insurance all at once. With the MyData business in mind, they also planned to add asset inquiry services and customized financial product recommendation services.

A Samsung Card official said, "We are currently reviewing whether the exemption clause for major shareholder permit requirements can be applied to acquiring the license for the MyData business we are currently operating and are seeking solutions."