"From MyData to Ancillary Tasks"... Card Companies Bet Big on Data Business (Comprehensive)

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 specialized 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 specialized 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 for big data analysis software sales as an ancillary business. It plans 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 specialized institution business to its corporate objectives. This move is a preparatory step for designation as a data specialized institution, which the Financial Services Commission plans to select early next year, and an effort to expand its data industry portfolio in the future.

Not only ancillary businesses but also MyData (personal credit information management business), which entered pilot service this month, sees active participation from credit card companies. Except for Samsung Card, which has not undergone review due to major shareholder eligibility issues, all seven full-service credit card companies (Shinhan, KB Kookmin, Hyundai, Lotte, Woori, Hana, BC) have received approval from financial authorities for MyData services. Currently, Shinhan, KB Kookmin, Hyundai, Hana, and BC Card provide services such as spending management, asset inquiry, and financial product recommendations on each card company's simple payment platforms like Shinhan Play, KB Pay, and Paybook during the pilot service.

The reason credit card companies are putting their lives on business diversification 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, with a strong expectation of further reductions. If fees are lowered again, profitability will inevitably deteriorate. Moreover, loan products such as card loans, which have offset fee losses so far, will find it difficult to recover profitability due to tightened 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 businesses related to data for credit finance companies." However, it remains uncertain whether this will truly relieve credit card companies. An industry insider said, "The data industry is a future growth engine but still in its early stages," adding, "It will take time before actual profits are generated."

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