The government announced that it will allow private firms to gain access to big data in the financial sector. It will provide data collected by public financial institutions to small and mid-size financial companies and fintech firms as well as create a platform for encrypted financial data to be bought and sold.
The Financial Services Commission (FSC) held a meeting chaired by Chairman Choi Jong-ku on March 19 to discuss how to utilize and protect data in the financial sector and confirmed the measures to promote the financial technology sector that uses big data analytics.
The FSC will enable public financial institutions, including Korea Credit Information Services and the Korea Insurance Development Institute, to offer their data on overall loans, overdue payments, loan guarantees, non-payments, workout, bankruptcy information, insurance payments and accidents to small and medium-size financial companies, startups, fintech companies and research institutions, starting in the second half of the year.
The two organizations have data on over 35 million people. The FSC will then select 2 percent of them, or some 740,000 people, at random to create a “standard database” and select data according to the need of individual financial companies to create a “customized database” and provide them to private firms. Such databases will be later be used to create new financial products that will meet consumer needs and analyze markets.
The United States has already been providing private firms with a database after selecting five percent of data on mortgage loan conditions, loan balances, loan repayments, overdue payments and loan guarantees at random from 1998.
In addition, in the first half of next year, the FSC will launch and test operate a platform for the private sector to buy and sell financial data. To this end, the Financial Security Institute will establish a platform to buy and sell financial data between consumers who need information and suppliers. In general, large financial companies, such as banks and card issuers, will upload summary data, such as data attributes, scales and period of usage, and consumers who need big data will search for data or make a request through the platform.
The information that will be traded on the platform will not disclose detailed personal information clients including their name, address and financial status. It will either be completely deleted or replaced with pseudonyms.