The Financial Services Commission has begun overhauling the personal credit information consent system in step with the financial sector's expanded use of artificial intelligence (AI·Artificial Intelligence).
The Financial Services Commission said on the 16th that, chaired by Vice Chair Kwon Dae-young, it held a kickoff meeting of the Legal Advisory Group on Overhauling the Personal Credit Information Consent System and discussed problems with the current consent system for using personal credit information under the Credit Information Act and the direction of the overhaul. Officials from the Financial Services Commission and the Financial Supervisory Service, along with academics and legal experts, attended the meeting.
At the meeting, Vice Chair Kwon said, "The consent system for using personal credit information is being run in an excessively strict and rigid framework, which in fact fails to substantively protect financial consumers' right to informational self-determination," and added, "There is a need to fundamentally reexamine the old 'fossilized regulation' framework that has remained in place for more than 30 years since it was introduced when the Credit Information Act was enacted in 1995."
At the meeting, participants suggested that regulations on personal credit information should be overhauled to align with international standards. Major advanced countries such as the European Union (EU) and Japan are establishing legal grounds to use personal information beyond the data subject's consent to bolster competitiveness in the AI industry. They also reviewed measures to diversify mechanisms that guarantee the rights of data subjects and to help consumers practically understand and control the scope of how their personal information is used.
The direction of the overhaul pursued by the Financial Services Commission goes beyond simple deregulation. The goal is to enhance the inclusive and productive value of the financial sector through data use while simultaneously strengthening consumer protection mechanisms. Young people, homemakers, older adults, and small business owners, who are in a blind spot of credit evaluation, will be enabled to access financial services by using alternative data, while institutional safeguards will also be put in place to prevent data misuse and excessive profiling.
Under the current Credit Information Act, financial companies must obtain the data subject's consent to use personal credit information. Although the system was introduced to guarantee the right to informational self-determination, in practice consent forms are overly complex and formalized, making it difficult for consumers to clearly know how their information is used.
The Financial Services Commission in particular believes that, as AI- and big data-based financial services spread, relying solely on the existing consent system makes it hard to meet demand for data use. To improve financial access for financial consumers with limited credit histories by using alternative data such as telecommunications, payment, and utility bill information, or for financial companies to use AI to provide tailored products and risk management services, more flexible legal grounds for data processing are needed.
The advisory group will examine legal issues related to the consent system overhaul during the upcoming process to amend the Credit Information Act and support the direction of institutional improvements. The Financial Services Commission plans to push for amendments to the Credit Information Act after collecting opinions from financial consumers, the financial sector, related agencies, and experts.