Scale of Data Provided by Financial Data Exchange
5 Times More Than Card Companies and Banks
[Asia Economy Reporter Ki Ha-young] Card companies are focusing on the data business, which is considered their future growth engine. This is interpreted as an effort to secure a leading position in the rapidly expanding data industry market by providing market analysis and marketing services based on card payment transaction data.
According to the 'Financial Data Exchange,' a data brokerage platform operated by the Financial Security Institute on the 20th, card companies ranked high among the eight popular supplier companies. KB Kookmin Card took first place, followed by Shinhan Card and Samsung Card in second and third place, respectively. A total of 100 companies participate in the Financial Data Exchange, with a total of 651 data items and 1,849 cumulative transactions.
Launched in May last year, the Financial Data Exchange operates as an open data exchange connecting financial institutions such as banks, card companies, insurance, and securities firms with industries including distribution, consulting, and energy.
The scale of data provided by card companies to the Financial Data Exchange is overwhelming. While the five major commercial banks in the financial sector offered about 50 data products, Shinhan Card registered 101, KB Kookmin Card 83, and Samsung Card 80 products. Among the top 10 general data products by transaction volume, eight were from Shinhan Card and KB Kookmin Card. Shinhan Card's 'Card Consumption Trends Due to COVID-19 (Number of Transactions)' and KB Kookmin Card's 'Subscription Economy (Food & Beverage, Grooming, Knowledge, Preferences, etc.) Usage Status' data had high purchase counts.
Card Companies Strengthen Data Alliances and Operate Their Own Platforms
Some card companies also operate their own platforms. KB Kookmin Card launched 'Data Root,' an open data integrated platform that analyzes and provides big data across various fields, in February. BC Card also operates a 'Financial Big Data Platform.'
They are also strengthening data alliances with other industries. In February, Shinhan Card decided to proceed with a data business alliance with SK Telecom, the top mobile carrier, Korea Credit Bureau (KCB), GS Retail, and home shopping companies. Hyundai Card is promoting a data alliance called 'Domain Galaxy' with PLCC (Private Label Credit Card) partners as it continuously launches PLCCs in the market. BC Card also formed a data alliance at the end of last year with three PG companies?KG Inicis, Danal, Settle Bank?and four value-added network (VAN) companies including NICE Information & Telecommunication, marking a first in the financial sector.
The reason card companies are entering the data business is to offset deteriorating profitability and gain an advantage in the data industry, which is seen as a future growth engine. This is because the merchant fee recalculation is scheduled for this year, and profitability is expected to worsen due to the reduction of the statutory maximum interest rate starting in the second half of this year.
An industry insider said, "Although profits from the data industry are still minimal, the key will be how to combine and monetize data in the future. Card companies with big data capabilities based on card payment data are competitively entering the data industry."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
