"No Future Food Sources"... Card Companies Bet Their Lives on Data Business

BC and Hyundai Card Apply for Ancillary Data-Related Tasks
Also Active in MyData Initiatives

[Asia Economy Reporter Ki Ha-young] Credit card companies, which are operating at a loss from merchant fee revenue, are diversifying their businesses centered on big data. With financial authorities promising broad allowances for ancillary businesses, attention is focused on whether data business can establish itself as a future source of revenue.

According to the industry on the 13th, BC Card recently reported to the Financial Supervisory Service that it will undertake the role of a pseudonymized information integration specialist institution as an ancillary business. This involves receiving integration requests from institutions holding different types of data, pseudonymizing the data, and then delivering the information. BC Card completed the infrastructure for the integration specialist institution this month and plans to fully launch data integration projects within the KT Group next year. The company aims to transform into a data enterprise.

Earlier, Hyundai Card applied to add the sale of big data analysis software as an ancillary business. The plan is to sell software that analyzes big data like an IT company to support efficient marketing execution. Shinhan Card held an extraordinary general meeting at the end of last month and added data specialist institution business to its corporate objectives. This move is a preparatory step for designation as a data specialist institution, which the Financial Services Commission plans to select early next year, and is part of expanding its data industry portfolio.

Not only in ancillary businesses but also in MyData (personal credit information management business), which entered pilot service this month, credit card companies are actively participating. Except for Samsung Card, which has not undergone screening due to major shareholder eligibility issues, all seven full-service card companies (Shinhan, KB Kookmin, Hyundai, Lotte, Woori, Hana, and BC) have received approval from financial authorities for MyData services. Currently, Shinhan, KB Kookmin, Hyundai, Hana, and BC Card are providing pilot services, and the remaining card companies plan to start services soon.

The reason credit card companies are putting their lives on business diversification like this is that they are recording losses in their core business of merchant fees. The results of the card fee recalculation, which occurs every three years, are scheduled to be announced at the end of this month, and the atmosphere leans toward further reductions. Loan products such as card loans, which have offset fee losses so far, will find it difficult to recover profitability due to strengthened regulations starting next year, and competition in the auto installment finance market is becoming increasingly fierce. For this reason, financial authorities have also promised to expand ancillary and concurrent businesses to support business diversification, considering the concerns of credit card companies. At a meeting with specialized credit finance companies held last month, Financial Services Commission Chairman Ko Seung-beom said, "We will further expand ancillary and concurrent data-related businesses of credit finance companies."

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