Passage of the Three Data Laws... Card Industry Cautious Amid Optimism (Comprehensive)

New Business Opportunities Using Big Data
But Need to Watch Specific Enforcement Decrees

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] With the passage of the amendment to the Data 3 Laws (Personal Information Protection Act, Credit Information Act, and Information and Communications Network Act) through the National Assembly, the card industry is experiencing mixed feelings of anticipation and caution. While they welcome new business opportunities utilizing big data, they emphasize the need to wait as the enforcement decree has not yet been established.

According to the industry on the 15th, following the approval of the amendment to the Credit Information Act at the plenary session of the National Assembly held on the 9th, card companies are considering entering new businesses such as the MyData business and credit evaluation (CB) services for individual business owners.

The Data 3 Laws introduce the concept of "pseudonymous information," which is processed so that specific individuals cannot be identified, allowing its use without personal consent. Accordingly, businesses such as MyData, which directly manage and verify personal information, and CB businesses can now be promoted. For example, with individual consent, personal information scattered across financial institutions such as banks, insurance companies, and card companies can be gathered to provide customized asset management services. For the card industry, which has been struggling with profitability deterioration due to reduced merchant fees?their main revenue source?this law's passage presents an opportunity to expand the scope of data utilization.

An industry official from the card sector explained, "The passage of the Data 3 Laws has opened the door to promoting the MyData and CB industries," adding, "For the card industry pursuing business diversification, this means securing new revenue sources." He further noted, "Big data also enables personalized marketing optimized for individuals."

However, there is also a cautious view that it is necessary to wait until the enforcement decree is issued. Among consumers, concerns have been raised that personal information could be used for commercial purposes without the subject's consent due to the law's passage. Another industry official said, "The amended content does not define the scope of pseudonymous information or information sharing, so there is uncertainty about feasible businesses," adding, "We need to wait until the specific enforcement decree is released."

Card companies are focusing on "digital innovation" using big data as a future strategy to prepare for the Fourth Industrial Revolution era. Even before the passage of the Data 3 Laws, they actively participated in innovative financial services promoted by financial authorities. A representative example is the promotion of CB services for individual business owners through the financial regulatory sandbox. Shinhan Card and KB Kookmin Card are developing credit evaluation models based on big data. Shinhan Card already launched the "MyCredit" service in October last year, which evaluates the repayment ability of individual business owners based on big data.

An industry insider said, "Digital innovation is a key topic for card companies," adding, "We are watching to see if big data-related businesses, which were difficult to pursue due to regulations, will gain momentum with the passage of the Data 3 Laws."

This content was produced with the assistance of AI translation services.