Financial Services Commission headquarters located within the central government complex in Seoul (Yonhap)
The scheduled launch of South Korea’s comprehensive data service project next month has been delayed, financial authorities said Thursday, with the COVID-19 pandemic stalling its development.
The government-led MyData project, when launched, will allow licensed service providers to collect and analyze personal data scattered across the finance sector. The service providers must collect consumers’ consent before they can access their data, currently held separately by different financial institutions such as banks and credit card issuers.
The policymaking Financial Services Commission has recognized the need to further review and test-run the adoption of the application programming interface, or API, software that allows service providers to smoothly collect data by connecting existing servers. It cited the lack of IT engineers for the project, as demand for engineers has risen with local businesses focused on developing online and mobile services, due to the pandemic.
The FSC earlier had requested service providers mandatorily replace their current data scraping system with the API.
Besides technical issues, the authorities said they needed to run additional pilot tests on whether the API system could handle the related network and data traffic for customer protection.
An FSC official said the e-commerce platforms and small businesses were “not quite ready” to adopt the API, and at the moment authorities’ goal is to launch the MyData service by the end of the year.
The FSC will also review whether to include real-name bank receipts that show the customers’ wiring history and data. Commercial banks here, however, have been against the idea, as it could lead to personal data leaks. The FSC explained they would have to receive customer consent first.
Furthermore, customers would be able to subscribe to multiple MyData services, but would receive warnings on data protection beforehand.
The service providers will be banned from excessive marketing, as it could fuel “unnecessary competition.”
The decision to further review the MyData services came after a meeting of FSC officials, experts and finance industry leaders held Wednesday.
The license for MyData service has so far been granted to 28 local financial institutions and financial technology firms. The five traditional lenders that bagged the license are KB Kookmin, NH NongHyup, Shinhan, Woori and Standard Chartered Korea. A total of 14 fintech firms, including Naver Financial and popular money transfer app Toss operator Viva Republica, received the license.
By Jung Min-kyung (firstname.lastname@example.org