Under the US-style data-sharing regulation, however, firms can collect and use some "non-essential" personal data without their initial consent, according to the FSC. Instead, they are given the right to opt out such use of their details.

The FSC said the nation's regulation on personal data could undermine the development of new technologies in South Korea, citing financial services based on the Internet of Things that constantly collect and update users' information.

Financial authorities have also planned to allow private firms to gain access to some credit information while minimizing the risks of privacy data breaches.

Under the plan, financial authorities will allow private financial firms and research companies to collect data on people's financial transactions, including their history of debt-repayment and car insurance, from the second half of this year. (Yonhap)