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Regulators remove barriers on use of big data in S. Korea

June 4, 2015
Lax regulations on big data means that consumer behavior's can be defined and predicted more easily (Courtesy of Jirka Matousek via Flickr/Creative Commons)

Lax regulations on big data means that consumer behavior’s can be defined and predicted more easily by those in possession of it (Courtesy of Jirka Matousek via Flickr/Creative Commons)

By Kim Jae-won

South Korea’s financial regulator has removed barriers on the use of big data, encouraging financial firms to use information collected from consumers in their business.

The Financial Services Commission (FSC) said Wednesday that financial institutions can use consumer information on the condition that individuals are not identified. Such information includes people’s financial transactions, income, payments and credit ratings.

“This means that financial firms can use people’s information freely for their business if they protect consumers’ privacy,” said Nam Dong-woo, a director at the FSC.

Big data is a broad term for data sets so large or complex that traditional data processing applications are inadequate. It is widely used in business to find out consumers’ appetite and their consumption patterns.

The announcement came as the regulator pushes for reform of the finance industry by applying new information technology to traditional business. FSC chief Yim Jong-yong has emphasized the role of so-called “fintech” in the finance sector, a term describing a combination of finance and technology.

The regulator said local financial firms needed to follow in the footsteps of their foreign counterparts, which had aggressively adopted big data. Analysts say Korean corporations are in the early stage of using big data.

The FSC took examples of the Bank of America, which has attracted more customers by using big data in its marketing channels, including social networking services. Citibank also increased the accuracy of its loan examinations by analyzing big data, the FSC said.

Observers said Google was one of the key companies that had materialized the technology. The U.S.-based firm has focused on using and analyzing big data and connecting it to its business.

Experts said big data changed people’s lives tremendously by helping them figure out what they want. According to a 2103 book titled “Big Data: A Revolution That Will Transform How We Live, Work, and Think,” big data can be used in a wide range of fields, from predicting the spread of bird flu to buying cheap air tickets.

The idea of encouraging local financial firms to use big data came from the Financial Reform Committee, an in-house committee of the regulator, chaired by former Seoul National University professor Min Sang-ki. A group of financial experts, college professors and business-people joined the committee, advising the FSC how to reform the industry.