South Korea’s top financial regulator said Thursday that it had granted approval to two regional banks -- Jeonbuk Bank and Daegu Bank -- to offer MyData services. It was a move to foster the burgeoning data-driven business segment, whereby the country’s major commercial banks have already begun procedures to launch related services. 

The policymaking Financial Services Commission granted preliminary MyData licenses to six financial firms, officials said. The others are KB Capital, KB Insurance, Kyobo Life Insurance and Shinhan Life Insurance. 

The entry of provincial banks will add fuel to rising competition in the banking sector for MyData business, experts say.

“Without obtaining permission for their own credit management businesses, local banks, especially provincial lenders which have a relatively limited customer base, would find it hard to cope with the digital transformation era,” said Kim Sang-bong, an economics professor at Hansung University.

“Traditional banks and their fintech rivals will keep scrambling to gain the upper hand in the burgeoning MyData market, supported by the government, to boost digital financial services.” 

MyData is a government-led business model that offers integrated management of personal credit information such as banking transactions and credit card records, and makes personalized product recommendations to customers. The MyData industry’s market is estimated at 20 trillion won ($17.65 billion), industry data showed. 

The legal framework to allow financial institutions to use personal data for commercial purposes is expected to be in place Aug. 5.

Ahead of the introduction of MyData, the FSC kicked off the preliminary application process in July last year for those that wished to enter the industry. Five commercial lenders -- KB Kookmin, Shinhan, Woori, NH NongHyup and Standard Chartered Bank Korea -- received formal MyData business licenses in January.