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] Samsung Card's planned MyData business is facing a complete halt. This is due to its major shareholder, Samsung Life Insurance, receiving a severe disciplinary action known as an 'institutional warning.' Samsung Card, which had been betting its future on MyData amid the rapidly changing payment environment caused by the entry of big tech companies into the financial market, is now under urgent pressure.
According to financial authorities and the card industry on the 4th, the Financial Supervisory Service's Disciplinary Committee held its 30th meeting the previous day and decided on a severe disciplinary action, issuing an institutional warning to Samsung Life Insurance. The final confirmation of the disciplinary measures will be made through the approval of the Financial Supervisory Service Commissioner or 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 disciplinary action, the company cannot enter new businesses requiring permits or approvals 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 and approvals.
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. It is a future growth area that card companies, facing profitability deterioration due to reduced merchant fees, are rushing to enter for business diversification. 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 approval, 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. Previously, the Financial Services Commission had put Samsung Card's MyData review on hold due to ongoing disciplinary procedures against its major shareholder. The administrative process to finalize Samsung Life Insurance's institutional warning will take at least 2 to 3 months, during which the first round of MyData permit screening will conclude. Although the Financial Services Commission plans to support partnerships with other MyData operators to provide services similar to those currently offered, this is only a temporary measure.
Samsung Card: "Reviewing Exceptions to Permit Requirements and Other Measures"
Samsung Card recently added an 'Assets' section to the menu of 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. The company had plans to add asset inquiry services and customized financial product recommendation services with the MyData business in mind.
A Samsung Card official said, "We are currently reviewing whether exceptions to the major shareholder permit requirements can be applied for acquiring the license for the MyData business, which we are operating as an existing business operator, and are seeking solutions."
In fact, the Credit Information Business Supervision Regulations include a fundamental but important exception clause regarding major shareholder requirements. It states that a major shareholder must not have received an institutional warning within the past year or corrective orders, suspension orders, or business suspension or higher disciplinary actions within the past three years. However, exceptions apply if such facts do not hinder sound business operations or if there is a need to support the rapid structural improvement of the financial industry.
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