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Top policymaker vows oversight of data monopoly by fintech firms

Koh Seung-beom, chief of the Financial Services Commission, speaks during an online press conference in Seoul on Dec. 3, 2021. (Yonhap)
Koh Seung-beom, chief of the Financial Services Commission, speaks during an online press conference in Seoul on Dec. 3, 2021. (Yonhap)
South Korea’s top financial policymaker said Thursday that he is seeking to work with other government bodies to prevent monopolistic practices by big tech companies holding vast amounts of personal data while promoting financial companies’ investment in financial technology.

The remark came amid growing concerns over the market dominance of Naver Financial and Kakao Pay -- the fintech services offered by the country’s largest internal portal and messenger app operator, respectively.

“Consumers are increasingly relying on a single company doing all the financial services multiple firms had to do. It’s the user data monopoly we’re worried about,” Financial Services Commission Chairman Koh Seung-beom said at a meeting that brought together fintech, insurance and credit card firms.

Koh added that rules will be different for tech giants and smaller firms, saying the commission was not all about creating new regulations, but was planning to ease existing rules as well to reinvigorate investment in the sector.

“We will waive some rules for firms trying out new financial services. We want to see those services get established quickly,” Koh said, referring to current regulations that critics say could delay the launch of new business features.

The top policymaker also referred to expanding firms’ access to user data the government holds. Last week, the commission launched “MyData,” a mobile service for people to look at their financial data -- savings and loans -- scattered across financial institutions like banks and insurance companies.

A total of 53 financial institutions, from banks to fintech firms like Naver Financial and Kakao Pay, will offer their customers the service within this month, after receiving approval from the commission.

Next week, Koh is expected to meet with the chiefs of the two biggest fintech firms, along with CEOs of the country’s major banks, to discuss ways to use data and artificial intelligence to enhance user experience. The exchange will mark the first official meeting between them since Koh came to office in August.

Meanwhile, Koh said his office would soon set the terms for loans to borrowers with poor ratings. The commission has said it will introduce a comprehensive system for loans starting next year, without elaborating on details.

By Choi Si-young (siyoungchoi@heraldcorp.com)
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