New data bills usher in era of 'data economy'

The Korea Times

The Korea Times

Finance

Sun, December 10, 2023 | 07:23

Economy

New data bills usher in era of 'data economy'

Posted : 2020-01-10 18:20

Updated : 2020-01-10 18:25

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By Kim Bo-eun

Korea is a step closer to the emergence of new industries and services utilizing big data after several data bill revisions were passed Thursday.

Revisions to the personal information protection act, the protection of credit information act and the information and communications network act were passed after remaining unresolved for over a year at the National Assembly.

They will allow the commercial use or provision of data of unidentified individuals without seeking their consent. Under the status quo, businesses need to seek consent or process data to conceal the provider's identity.

The finance sector, among various industries, is set to benefit, as banks, card firms and insurers hold a massive volume of customer data.

The easing of regulations enables the opening of the new industry based on personal data, a business of providing integrated management of personal information scattered across financial firms, and making customized recommendations for financial product services.

In countries such as the U.S. and the United Kingdom, the industry has already been growing. The U.S. platform Datacoup, established in 2012, enables consumers to sell their own data. The U.K.-based Handshake is a similar platform.

Not only fintech startups but also IT giants such as Naver and Kakao, which have begun offering financial services, will be able to accelerate and scale up their businesses.

To foster the data industry here, financial authorities are seeking to set up a data exchange.

The Financial Security Institute, which has taken on the task, is in the process of setting up a system that bridges financial firms with other industries so financial data can be sold.

Various new financial products and services will be able to be developed when the data exchange is established, which is set for March.

The new regulations are also set to change the credit rating business, as credit scoring based on non-financial data such as the payment of phone or electricity bills will become possible.

This will enable those with thin credit files to get loans. Such people accounted for 27.8 percent of the population subject to credit rating, as of the first half of last year.

The Korea Chamber of Commerce and Industry welcomed the passage of the bills, Friday.

"Data in the era of the Fourth Industrial Revolution is like crude oil, and will become a force in developing new business models in new industries, as well as in swiftly identifying and dealing with customer demand and market trends," it said.

Jung Yoo-shin, chief of the Fintech Center Korea, said: "Utilizing data, businesses will be able to provide customized products and services, which will heighten customer satisfaction.

"This is the stage where artificial intelligence (AI), blockchain, cloud, big data, internet of things and 5G are merged to offer customized services. This signals the beginning of an era of digital platform technology."

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki pledged to "provide support so that the effect of the revised regulations could be maximized."

"We expect the revised regulations will help develop customized services and create new businesses through convergence of data between various industries," he said.

The Financial Services Commission will soon establish ordinances under the revised regulations. They will go into effect as early as July.

bkim@koreatimes.co.kr