‘Scrapping technology’, which is used by 30 countries and 2,500 organizations, is on brink of disappearing due to counter-regulation set by South Korean Government to invigorate MyData industry.
It is because South Korean Government finalized on a decision that will prohibit scrapping method that directly uses customers’ authentication information after a certain grace period. South Korean Government’s plan is to create infrastructures that will provide information through open API (Application Programming Interface) rather than scrapping technology to strengthen information security. Companies and financial organizations that are related to scrapping technology are bringing up issues to such plan made by South Korean Government.
South Korean Government and relevant industries will hold a meeting to innovate regulations that will invigorate data economy. Reverse discrimination controversy is inevitable although this will be a place to break regulations regarding data usage as it is a measure to prohibit scrapping technology. Financial Services Commission (FSC) previously stipulated prohibition of scrapping into a plan of introducing MyData industry to financial fields. Scrapping is a technology that has been used since the end of 1990s before internet websites have become generalized.
Scrapping technology is a technology that informatizes contents from websites by collecting and storing them. It has evolved from crawling technology, which is based on search engine, and is widely used by different industries for financial asset management, e-mail management, mileage management by hotels and airlines, price comparison sites, and news and weathercast. Starting with China in 2013, scrapping services have been expanding towards other countries such as Japan and South-East Asia. Most of them use technologies by South Korean companies.
FSC categorized scrapping technology as a ‘dangerous and vulnerable security technology’ by stating examples such as when Europe prohibited scrapping technology based on GDPR (General Data Protection Regulation) after a certain grace period and a hacking incident involving scrapping technology in Australia.
Scrapping industry opposed South Korean Government’s plan by stating that South Korean Government does not know truth about scrapping technology.
No European country has ever invigorated scrapping technology. U.S. and Japan are the ones that are most active in using scrapping technology. This is the reason why South Korea’s financial authorities are being criticized for announcing a policy that is basically based on regulations of European countries where scrapping technology was never active. Although South Korean Government claimed that there is a weak spot to scrapping technology by giving an example of an incident in Australia, it was found out that this incident is actually not true.
“Financial authorities introduced leading MyData service providers and ironically, all of them actually use both API and scrapping technology.” said a high-ranking official of a scrapping company who requested anonymity. “Source of a hacking incident in Australia is not confirmed and it is also not known whether scrapping software (SW) was hacked.”
Experts criticized South Korean Government for tying hands of relevant companies by creating false regulations in order to invigorate MyData industry.
They claim that it is realistically impossible to convert scrapping into API system. Although open API has high usage rate as an infrastructure that provides new information, there are only about 100 APIs in South Korea.
While financial organizations, large corporations, and public organizations are all using scrapping technology, it will require enormous amount of cost and time to convert scrapping technology into API. When regulations are in place, companies such as Coocon, Finger, Kiwoong, and Heenam that export their scrapping technology have to think about closing down their businesses. Also, internet-only banks that have shown innovative services through scrapping technology and FinTech companies such as Toss and Bomapp are also likely to be affected by South Korean Government’s plan. CMS (Cash Management Service) and ERP (Enterprise Resources Planning) companies also need to change their systems for collecting information.
Scrapping industry emphasized that scrapping technology must coexist with API within markets. If that is difficult to do so, it stated that S
Scrapping industry is sending its opinions along with other relevant associations and groups to South Korean Government and it is also looking to take actions together with these groups.
Staff Reporter Gil, Jaeshik | osolgil@etnews.com