The 20 Trillion Won MyData Market Opens... The Era When My Information Becomes Money Has Arrived

28 Companies from Various Industries to Launch Services Starting Next Month on the 5th

[Asia Economy Reporter Kiho Sung] The Personal Credit Information Management Business (MyData), known as the "financial secretary in your hand," will be officially implemented on the 5th of next month. At the start of the service, not only traditional financial institutions such as banks, card companies, insurance, and securities firms but also various companies regardless of industry, including Toss, Naver, and SK Planet, will begin their operations. Financial consumers will be able to organize and summarize their financial information directly. As they receive optimized, customized products and services, Private Banking (PB) services and Wealth Management (WM) services, which have so far been exclusive to high-net-worth individuals, will also become available.

According to the financial sector on the 20th, the Financial Services Commission (FSC) selected the final licensed MyData operators at the regular FSC meeting composed of nine members on the 27th. The final licenses were granted to 28 companies, including five banks?Kookmin, Shinhan, Woori, Nonghyup, and SC First Bank?and 14 fintech companies including Naver Financial. Companies that passed the licensing review will officially compete to capture the domestic data industry market worth 20 trillion KRW starting from the 5th of next month. Companies that do not receive licenses must cease their existing MyData-like service activities.

According to the Ministry of Science and ICT and others, the domestic data industry market size grew by more than 14%, from 16.8582 trillion KRW in 2019 to 19.2736 trillion KRW in 2020. By sector, the data sales and provision service industry is the largest, with 9.3752 trillion KRW. The government is progressing with plans to expand the domestic data market to 30 trillion KRW by 2023.

MyData Enables Product Recommendations and Comparisons Using Your Own Information

The government's electronic finance promotion plan is broadly divided into Personal Credit Information Management Business (MyData) and Payment Instruction Transmission Business (MyPayment). The plan aims to actively foster the fintech (finance + technology) industry and startup companies through this two-track strategy.

MyData is a service that collects scattered personal credit information from financial companies into one place and shows it to the individual. Additionally, an AI-based system analyzes various data such as personal financial life patterns, asset formation goals, and age groups to recommend financial products. Operators can analyze customers' card transaction histories, insurance information, investment information, etc., to recommend advantageous financial products. Customers can compare the conditions of financial products subscribed to by consumers with similar credit ratings, assets, and loans. They can also receive and subscribe to customized loan products from financial companies through the MyData application (app).

For example, once MyData is activated, consumers will no longer need to visit bank counters in person to get a loan; they only need to grant banks access to their personal information to receive recommendations for the lowest-rate loans.

MyPayment Business, Where Fintech Companies Become 'Quasi-Banks,' Is Also on the Horizon

With the MyData service era opening next month and the amendment to the Electronic Financial Transactions Act expected to pass the National Assembly this year, financial market liberalization measures such as MyPayment and comprehensive payment license issuance will be fully implemented, making a major restructuring of the financial industry inevitable.

MyPayment is a service that allows consumers to make payments without holding payment funds. It is easy to think of credit cards. If fintech companies obtain a comprehensive payment license, they will be able to issue accounts, which was previously only possible for banks and other financial institutions. Once the related bill passes, big tech (large information and communication companies) and fintech companies based on data will become 'quasi-banks' capable of performing most banking tasks except deposits and loans.

For example, consumers will be able to create 'Naver or Kakao accounts' to use as salary accounts, and automatic transfers for card payments or insurance premiums will be possible from these accounts. Additionally, postpaid payments up to 300,000 KRW per month will be available, enabling the use of '00Pay' like a credit card. Although there is no deposit function and thus no interest, points can be earned proportionally to payment performance.

The resulting changes in the financial industry landscape are inevitable. Senior Research Fellow Byungho Seo of the Korea Institute of Finance predicted, "If MyData operators also obtain the comprehensive payment license to be introduced this year, enabling account issuance, transfers, and remittances, it will effectively introduce new competitors within the banking industry, changing the industry's landscape."

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