Specific reasons to be provided when rate cut requests are rejected
A total of 114 entities expected to participate in the first half of this year
FSC expects up to an additional 168 billion won in annual interest savings
Once a consumer gives one-time consent, a MyData business operator will be able to automatically exercise the right to request an interest rate reduction on the consumer's behalf. The Financial Services Commission has decided to increase the effectiveness of the system by requiring that, if an application for a rate cut is rejected, the specific reasons must be clearly explained to the consumer.
On the 25th, the Financial Services Commission announced that it will launch the "MyData-based Interest Rate Reduction Request Service" on the 26th, under which a MyData business operator will automatically apply for an interest rate reduction right on behalf of a consumer. In December last year, the commission newly designated the "Interest Rate Reduction Request Agency Service Using MyData" as an innovative financial service.
Until now, the financial authorities have promoted the activation of the system by notifying borrowers who are likely to qualify for an interest rate reduction about the right to request a rate cut at least once every half-year, and by disclosing the acceptance rate for each financial company. However, criticism has continued that many consumers fail to use the system because they do not know it exists or do not know how to apply, due to their busy livelihoods and work. There have also been opinions that, when a request for a rate cut is rejected, the lack of specific explanations on the reasons limits consumers' understanding and use of the system.
In fact, according to the Financial Services Commission, the number of applications for the right to request an interest rate reduction increased from 2,544,000 in 2022 to 3,961,000 in 2023, then slightly decreased to 3,895,000 in 2024. In the first half of 2025, it reached 1,638,000 cases. The acceptance rate stood at 31.2% in 2022, 35.7% in 2023, 33.7% in 2024, and 28.8% in the first half of 2025.
In response, the Financial Services Commission has put in place a system under which, going forward, once a consumer gives one-time consent to a MyData business operator, that operator can automatically exercise the right to request an interest rate reduction. Consumers can choose one of the 13 MyData business operators, sign up and complete asset linkage, then select their loan accounts and agree to the automatic application service for interest rate reduction requests.
A MyData business operator that has obtained consent may regularly apply for a rate cut up to once a month. If a clear reason arises, such as an increase in income or an improvement in credit score, it may also file applications on an ad hoc basis.
If a request for a rate cut is rejected, the MyData business operator will identify the reasons for non-acceptance and inform the consumer. For example, it will specifically indicate areas that need improvement, such as an increase in annual income, promotion in job position, acquisition of qualifications, expansion of transaction records, partial repayment of loans, or resolution of delinquencies. The operator will also reconfirm, once a year, whether the consumer wishes to maintain the agency arrangement, in order to safeguard the consumer's right to self-determination over personal information.
A total of 70 entities will participate, including 13 MyData business operators and 57 financial companies such as banks, savings banks, insurance companies, mutual finance institutions, card companies, and capital companies. Once IT development is completed, an additional 5 MyData business operators and 39 financial companies will join, and a total of 114 entities are expected to offer the service within the first half of the year.
The Financial Services Commission expects that, if the service becomes widely used, it could generate annual interest savings of up to 168 billion won, mainly for loans to individuals and sole proprietors.
An official at the Financial Services Commission said, "This is the first case of implementing an inclusive finance policy that people can tangibly feel, using AI- and data-based digital technology," adding, "By enhancing the effectiveness of the right to request an interest rate reduction, it will help ease the interest burden on consumers who are busy with their livelihoods, such as low-income earners and small business owners."
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