The financial authorities are set to reform the personal credit information consent system to promote the use of artificial intelligence (AI) financial services and alternative credit assessments. The goal is to reduce the repetitive consent procedures during financial transactions, thereby minimizing consumer inconvenience and broadening the data utilization base.
On June 16, the Financial Services Commission (FSC) held a kickoff meeting for the 'Legal Advisory Group on Reforming the Personal Credit Information Consent System' to discuss improvements to the consent framework under the Credit Information Act.
Currently, the Credit Information Act requires individual prior consent at each stage of collecting, using, providing, and querying personal credit information. Financial institutions must inform consumers of the purpose of information use and the institutions providing the data, and they must obtain consent again whenever the providing institution or the type of information changes.
The FSC believes this structure increases consumer 'consent fatigue' and limits financial institutions' ability to utilize AI and data effectively. For example, when trying to use telecommunications and platform information for alternative credit assessments for thin-file borrowers with limited credit history, institutions must obtain renewed consent each time a new data provider or information type is added. Similarly, in refinancing loan brokerage services, existing customers must give consent again if additional partner financial institutions are included.
This also poses obstacles to the introduction of AI financial services. For banks to analyze the assets of their affiliated securities and insurance companies using AI chatbots, they must obtain new consent for information sharing between affiliates. Services utilizing AI agents for interest rate reduction requests and refinancing loan execution are also limited due to the repetitive consent procedures for information queries.
Kwon Dae-young stated, "There is a need to fundamentally review the outdated 'fossil regulation' framework that has been in place for over 30 years since the enactment of the Credit Information Act in 1995."
Based on discussions from the legal advisory group, the FSC plans to refine the reform proposals for the consent system under the Credit Information Act and will gather opinions from financial consumers, the financial sector, and experts to push for legislative amendments to the Credit Information Act.
* This article has been translated by AI.
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