[Financial IT Talk] "Selling Finished Products Instead of Data and Raw Materials" KB Kookmin Card Data Root

Interview with Lee Hojun, Head of Data Strategy Group at KB Kookmin Card

"If we compare the raw data held by card companies to a raw material, KB Kookmin Card's Dataroot is a platform that processes this raw material to provide 'finished products' or 'semi-finished products.' Providing data in this completed form is practically a more value-added data business," said Lee Ho-jun, Head of the Data Strategy Group (Executive Director) at KB Kookmin Card, in an interview with Asia Economy at the KB Kookmin Card headquarters in Jongno-gu, Seoul on the 20th.

He explained, "By preparing finished products, companies, local governments, and public institutions that are not familiar with data can conveniently use them."

Dataroot is an online-based data analysis platform launched by KB Kookmin Card in early last year. It provides big data visualized reports and various ancillary services based on the usage performance of its own credit and check cards. Free services will be provided to 228 local governments nationwide until the end of this year.

Lee, an expert in big data who has worked at SK Telecom and SK Planet, was recruited by KB Kookmin Card last year. He emphasized, "It is true that it is difficult for sole proprietors, small and medium-sized enterprises, and even mid-sized companies to establish human and physical infrastructure related to data analysis, and large companies also have data they do not possess themselves. The core of future data business will be how well card companies can process and refine the data they have and turn it into services."

The following is a Q&A with Lee.

- What kind of platform is Dataroot?

▲ Dataroot is an online-based open data business integrated platform that quickly and easily analyzes big data from various fields to derive insights. It consists of an 'analysis solution' that provides reports on trends and status by analyzing commercial districts and regions based on big data such as members, merchants, and transaction details; 'insights and products' that allow viewing various data products and reports needed to solve business problems; and an 'advertising service' that sends advertising messages to desired target customers using big data and marketing infrastructure.

- Recently, the 'Financial Data Exchange' was also launched. What are the differences?

▲ The Financial Data Exchange provides the raw material data that the demand side wants, whereas Dataroot provides finished products by analyzing, visualizing, and time-series processing various data. It is useful for analyzing certain information or reporting to management. Additionally, it features the ability to link and utilize various information and services, not just a single data set.

- Could you explain the specific business model?

▲ In big data business, it rarely ends with just analyzing data. Once data is analyzed, various needs arise such as how to conduct marketing and advertising. For example, if a local government has finished a regional festival in the first half of the year, the goal is to create a cycle by comprehensively analyzing various data to advise on what to do in the second half and which audiences to target with marketing-based long message service (LMS) advertisements to ensure success.

- It seems especially useful for small business owners who have little data analysis capability.

▲ That's right. Recently, we have been in discussions with public institutions responsible for related tasks to assist them. Through various data held by KB Kookmin Card and financial support data such as loans held by those institutions, we can provide comprehensive consulting. However, it is true that even mid-sized companies find it difficult to establish infrastructure for data analysis and processing, and large companies, although having infrastructure, often lack data they need, leading to inquiries. Large companies also have competitors and need data to understand market competition dynamics. Recently, with the economy freezing, interest in overall market fluctuations seems to be high.

- Are there any successful cases?

▲ There is the case of Yangsan City in Gyeongnam Province. Yangsan analyzed regional consumption changes before and after festivals and events by combining AI-based visitor and floating population data through the services provided by Dataroot. It was recently selected as an 'Excellent Case of Big Data Analysis by Local Governments in 2022' by the Korea Local Information Research & Development Institute. Besides local governments, inquiries and interest in data collaboration, including the use of Dataroot, have increased among various public institutions and private companies, which I consider one of the most beneficial outcomes so far.

- Other card companies are also active in the data business.

▲ KB Kookmin Card has a standardized technical process from data acquisition to processing, refining, and uploading to the platform. We also have capable modelers. I believe what matters is not the data itself but how well we can create finished products from the data and how effectively those finished products appeal to customers.

- Is there any benefit for general customers who receive financial data?

▲ I think they can enjoy indirect benefits. For example, if a company or local government effectively uses Dataroot to carry out various marketing or policy projects targeting specific customers, it can translate into benefits for those customers.

- What are the plans for advancing Dataroot?

▲ Operating the platform, we have found common needs among companies and local governments. For companies, there is a strong demand related to competition, and for local governments, there is a demand for analysis of regions and commercial districts. We are currently trying to provide separate manuals for them. We are also working on visualizing public data held by each local government or the government by mixing it with data held by KB Kookmin Card. Above all, we do not view Dataroot solely from a profitability perspective but hope to achieve a harmonious balance between public interest and profitability in terms of social value. For example, local governments, small business owners, and self-employed people who currently receive data free of charge can secure their profitability through data, and this will circle back to the company, which is the direction we are pursuing.

- On a separate note, you recently built an 'inter-industry data platform' and partnered with Lotte Card, a competitor in the same industry.

▲ We do not exchange data one-on-one with Lotte Card. The platform includes various members such as KB Kookmin Card, T Map Mobility, Lotte Department Store, and Topaz Travel Information. For them, the more card data they have, the higher the utilization, which means they can offer more diverse benefits to customers. In short, you can understand this as an effort to expand the overall data alliance pie.