S.K.’s FSC urges MyData regulation overhaul, fair pricing and streamlined processes

The proposed changes aim to establish reasonable standards for the pricing of data transfer costs, ensuring a sustainable operational environment for MyData services.

South Korea’s Financial Services Commission pushes for change in supervisory regulation on credit information businesses.

The intention is to foster continued innovation in financial MyData services. The proposed revisions have been developed following task force meetings and consultations with MyData service providers and specialised data institutions.

Primarily, the proposed changes aim to establish reasonable standards for the pricing of data transfer costs, ensuring a sustainable operational environment for MyData services. 

Since the initiation of MyData services in January 2022, providers have been collecting information from various sources like financial institutions, telecommunications service providers, and payment gateways. 

The proposal outlines a standard cost approach to calculate data transfer costs, based on the expenses involved in establishing and operating a relevant data transfer system. MyData service providers may be eligible for cost discounts based on individual business circumstances.

To uphold fairness and transparency, the specific procedures for pricing data transfer costs will be determined by Korea Credit Information Services (KCIS), which will establish a consultative body comprising various stakeholders. 

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These pricing standards will take effect in 2023, with payments in instalments commencing from 2024. The Korea Financial Telecommunications & Clearings Institute (KFTC) will implement an integrated payment system for data providers and MyData service providers.

Furthermore, the proposed changes permit data-specialising institutions to offer consultancy services in the areas of data convergence and pseudonymisation, particularly to small- and medium-sized fintech businesses lacking professional expertise. 

Currently, twelve data-specialising institutions provide verification services for data convergence carried out by financial institutions. 

The proposal seeks to streamline the application process for data convergence by eliminating the disparate requirements under two separate laws—the Credit Information Use and Protection Act and the Personal Information Protection Act.

Lastly, the proposal stipulates that the qualification of executive officers in data-specialising institutions needs verification for designation, excluding national and regional government organisations. Under the revised rules, this exemption will extend to public organisations overseen by relevant government ministries with internal control mechanisms.

The proposed changes will undergo public consultation from 7 to 19 December, with the FSC working towards the implementation of the revised rules within the same year.