Reasons for Proposal
In the 4th Industrial Revolution characterized by the Internet of Things, Artificial Intelligence, etc., data will not only be the basis of innovative growth, but also contribute to building a fair market economy in which everyone will have an opportunity for open competition. In addition, if the data industry that provides expert services related to production, distribution, collection, analysis, and use of data, it is expected to create good jobs with high wages and satisfaction level, along with a high growth potential for young and middle-aged persons, while at the same time meeting various market and industry needs.
Particularly as a result of embracing many individuals and businesses in public finance, the financial sector has a vast amount of standardized data accumulated that is systematically managed by the financial business sector such as banking, credit card, insurance, and financial investment, by utilizing diverse data for credit review in its development process. The nature of such data in the financial sector enables the development of customized financial instruments reflecting personal characteristics such as consumption, investment behavior, risk preferences, or even fusion with other industrial fields including information communications, location information, health and medical care. As such, the benefits of innovative growth are directly related to people’s lives, indicating that the utilization value of data is very high.
As attested to by the EU’s GDPR (General Data Protection Regulation) which was fully enforced in May of this year as a system representing information protection legislation for the whole world with the most far-reaching influence, the large economic blocs such as the US, China, and EU are scrambling to implement data-based innovative growth by seeking information protection in balance. In contrast, as shown in the material announced by the International Institute for Management Development in Switzerland, domestic companies’ usage of Big Data is mere 7.5%, and their level of Big Data utilization and analysis ranks 56th among 63 countries in the world, exhibiting a low level of data utilization. Moreover, despite this country’s most stringent information protection regulations in place around the world, data subjects are not effectively protected, and data utilization is hampered as well because these regulations are poorly made and enforced, as assessed by foreign press agencies and professional institutions.
Accordingly, the Amendment aims to rectify and improve the inadequacies revealed in the operation of the current system in the following ways: Provide scope for consumer-centered financial innovation and extension of reach of of finance through active data utilization along with positive accommodation of the global environmental change toward a Data Economy; clarify the legal basis for Big Data analytics and utilization to increase reliability of people’s financial information protection; implement further safeguards to prevent negative reactions that may occur from Big Data utilization; institute deregulatory measures to invigorate the data economy such as modifying clauses similar to and overlapping with statute law, that is, the ‘Personal Information Protection Act’; advance the regulatory system regarding the credit information-related industry as a data industry in the field of finance through the introduction of My credit information management business (MyData Industry), professional person’s credit evaluation business (Credit Bureau), and sole proprietor credit evaluation business, and through modification of the operational system of the current credit inquiry business; make personal information protection in the field of finance more secure through the introduction of the right to self-determination of new personal information such as modifying the system requiring consent to information use, the right to data portability, the right of the principal of credit information to demand explanation about automated evaluation (Profiling), etc.; modify the concept of statutory credit information to ensure that various types of new technologies that manifest themselves in the 4th Industrial Revolution are incorporated in the credit information management system in a stable manner.
Details
A. Clarify the legal basis for analysis and utilization of Big Data in the financial field
1) Introduce the concept of information under a false name as personal credit information which has been processed to prevent a specific person from being identified (arranged to take a false name) unless using additional information; allow information under a false name to be used or provided without the consent of the principal of the credit information for purposes of compiling statistics (including compilation of statistics for commercial purposes including market survey), research (including industry research), record preservation for public interest, thereby invigorating the analysis and use of Big Data in the field of finance. (Article 2 (15)ㆍ(16) and Article 32, paragraph 6, subparagraph 9-2 ∙ subparagraph 9-4 newly inserted, Article 33, paragraph 1, subparagraph 4)
2) Put such safeguards in place to prevent negative reaction that may occur from analysis and use of Big Data as:
Make credit information companies separate and store the additional information used for measures taken under a false name; make credit information companies establish and implement specified technical, physical, and managerial security measures to protect information under a false name; make them immediately stop credit information processing in case a specific person becomes identifiable in the process of using information under a false name, and impose obligations to immediately delete the information that has made a specific person identifiable. (Article 40-2, paragraph 1∙ paragraph 2 and paragraph 6 - paragraph 8 newly inserted)
3) Remove the legal uncertainties resulting from the utilization of Big Data by financial companies, etc., by presuming the information to have been processed to make a specific person no longer identifiable if the information has undergone an adequacy assessment by a specialized data processing agency designated by the Financial Service Commission with respect to the measures taken to process personal credit information anonymously (Article 2(17), Article 26-4, paragraph 3, Article 40-2, paragraph 3 – paragraph 5 newly inserted)
