"After MyData Launch, Adults Connect an Average of 16 Financial Institutions"

Toss Insight Report: Enhancing Delinquency Counseling and Repayment Capacity Assessments

Viva Republica, the operator of Toss, announced on October 13 that Toss Insight, its financial management research institute, had published a report titled "MyData: Shifting the Balance of Power in Finance."

A consumer using a MyData service. SK Telecom.

The report analyzed with real-world data how MyData services are changing finance. MyData brings together, at the individual level, information scattered across multiple financial companies.

According to the Toss Insight report, as of the end of July, adult users who had linked their financial information to Toss MyData had connected an average of about 16 financial institutions. Actual transactions, including deposits and loans, cards, and insurance, were confirmed at an average of 10 institutions, or about 60% of the total. The report said that information from multiple companies must be consolidated around each individual to accurately assess their current financial situation.

The findings showed that consolidating scattered information makes it possible to better understand changes in repayment capacity and financial circumstances that may not be fully apparent from conventional credit information alone.

The analysis found that the subsequent three-month rate of new delinquencies among people who faced high financial pressure for three months was 2.1%, about 2.6 times the 0.8% rate for those who faced pressure for one month. The report said that notifying users of such information in advance and connecting them with counseling could help them review repayment plans and consider necessary support before they become delinquent.

Meanwhile, the subsequent three-month rate of new delinquencies among people with limited credit histories but strong current repayment capacity was 0.23%, less than half the 0.57% rate among a comparison group with similar credit histories. The report said that distinguishing between an inability to repay and a lack of records demonstrating the ability to repay is the starting point for inclusive finance.

The analysis also found that when information moves with individuals, the basis of competition changes. In the card, securities, and insurance sectors, forecasts of customers' future financial transactions were more consistent with their actual behavior when records from other companies were considered alongside a company's own records than when only its own records were used. Toss Insight said that even companies with limited transaction records can better understand customers by using records from elsewhere, potentially shifting the focus of competition from "the volume of information held" to "providing greater value."

In fact, the study found that about one in four users with at least two comparable cards saw which card offered the greatest benefits change after their spending records from other card companies were also considered. This means users can be guided to make better use of cards they already have without applying for a new one.

The report projected that if these two changes work together, they could lay the foundation for "consumer-centered finance," in which individuals' choices drive competition among financial companies and the resulting benefits flow back to individuals. However, the report said that for these changes to improve people's actual financial lives, users, financial companies, and policymakers must each do their part.

Users must choose how their information is used; financial companies must explain the basis for their recommendations and correct inaccurate information; and policymakers must help companies compete through such services and assess their impact.

Toss Insight research fellows Noh Yucheol and Kim Taerin said, "The value of MyData goes beyond bringing together multiple financial accounts on one screen. When scattered information is consolidated around individuals, it can provide a more accurate picture of their repayment capacity and encourage financial companies to compete by offering better services."

This content was produced with the assistance of AI translation services.