FSC unveils its plan for fintech deregulationKorea has big dreams for its fintech industry, and the Financial Services Commission (FSC) is planning to use new payment systems, communication technologies and blockchain to realize them.
The FSC unveiled a plan on Tuesday to change regulations to encourage the fintech industry to take advantage of new technologies.
The FSC said the goal is to approach fintech development with the intention to support, rather than regulate, the implementation of advanced technologies in financial services.
Regulators gave examples of how businesses could take advantage of the regulatory rollbacks, saying that customers will be able to purchase investment products via video chat, and small businesses could solicit investment through crowdfunding.
The financial regulator hopes that the fintech industry will not only contribute to innovative growth but also increase the income of general financial investors by lowering commission payments and other service charges. They also hope fintech will contribute to the creation of more job opportunities, particularly for young people.
The plan came a day after the FSC announced it is widening access to financial customers’ data for small and mid-size financial companies, including fintech start-ups. It hopes that smaller companies can come up with new, innovative financial investment products.
Other technologies that the government is planning to approve include an accessible payment system called app-to-app. Using the system, customers can purchase goods from sellers via apps without having to go through credit card companies or card network providers.
The transactions will still be charged by banks. However, the FSC said that as such services will increase competition, commission rates for consumers will go down.
The fintech company Toss has been testing app-to-app payments in several areas, including Seoul and Jeju, since July last year. Online banks K Bank and Kakao Bank are currently developing services targeted for launch this June. The FSC will encourage banks and insurance companies to use blockchain technology to enhance the security of clients’ financial information. Blockchain can also make consumers’ lives easier by simplifying the verification process.
“The players in the financial service market are becoming more diverse, with new companies entering, and the competition in the financial market is becoming fiercer,” said FSC Chairman Choi Jong-ku. “As a result, existing financial companies are also making attempts with fintech to raise their services.”
The FSC chairman said the potential that these advanced technologies have will lead the country to innovative growth. The Moon Jae-in administration last year named fintech one of its eight leading innovative growth industries.
The FSC chairman noted that innovations from fintech companies will help expand job opportunities.
“Fintech is an area that requires new technologies, and it will solve the youth job problem by increasing job positions for young people,” Choi said.
BY LEE HO-JEONG [firstname.lastname@example.org]