Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Samsung Card falls victim to sanctions on Samsung Life
Samsung's corporate logo on the company's building in Seoul on Oct. 12. / Yonhap
By Lee Min-hyung
By Lee Min-hyung
Samsung Card faces a growing challenge in expanding its data-driven businesses next year, after the Financial Supervisory Service (FSS) handed down a heavy sanction on the card firm's largest shareholder, Samsung Life Insurance.
Under the nation's credit information supervision act, companies are not allowed to tap into new businesses for a year if their largest shareholder receives an institutional warning or a stronger penalty from a financial regulator.
The FSS decision comes at a crucial time when Samsung Card is making full preparations to win a license to operate a MyData business. Under the MyData drive, financial companies can provide personal information of customers to a third-party MyData business operator, so customers can access scattered financial information more easily.
Card companies ― such as Samsung Card ― are going all-out to win the license to operate the business, which it believes will help diverse its revenue streams amid the rise of big data. Their data-driven businesses risk being suspended if it fails to win the license before February 2021.
Samsung Life has yet to confirm whether to accept the sanction or file for administrative litigation. Samsung Card is also conducting a legal review to enable the firm to win the license.
A group of 35 financial firms here have applied for a preliminary license for the MyData business, and the Financial Services Commission is carrying out screening over whether they are qualified. The authority has, however, suspended the screening process for six of them ― including Samsung Card.
“Card firms are desperately seeking to win the license in a timely manner, so as not to fall behind the competition in a new revenue area,” an industry source said. “Those who fail to win the license before February will have to compete more fiercely against their rivals.”
On late Thursday, the FSS confirmed the sanction on Samsung Life for its failure to make full insurance payments worth 52 billion won to a group of cancer patients. The company provided only 28 billion won out of the total by deducting some claims on convalescent hospital costs.