FSC promotes fintech and innovation in financial services. In order to encourage convergence and collaboration between finance and information technology, FSC launched the financial regulatory sandbox scheme in April 2019, through which more than one hundred ‘innovative financial services’ have been designated. The regulatory sandbox program allows fintechs and start-ups to test out their ideas without worrying about the regulatory impediments. In addition, Korea’s open banking system was fully launched in December 2019, opening up payment networks to both banks and fintechs through a joint network. By creating a financial data exchange platform, fostering MyData industry and opening up extensive sets of public financial data stored at major public institutions, FSC is also working to create an environment where big data and AI can play a larger role in finance. Policies intended to promote innovation also include providing tailored support to the Korean fintech firms to help them grow and scale up as global unicorns by easing regulations, expanding investment and providing assistance for overseas business expansion.
Mar 03, 2021
- FSC Holds Meeting on Developing Corporate Finance Platform to Support Innovative Businesses
- Vice Chairman Doh Kyu-sang held a meeting on corporate finance via teleconference on March 3 and discussed ways to develop a corporate finance platform to more effectively provide financing support to innovative businesses. The meeting also discussed recent trends in corporate finance in both traditional and newly emerging industries and policy issues surrounding corporate finance in a post-COVID-19 era. The following is a summary of Vice Chairman Dohs opening remarks. (Policy on Corporate Finance) The COVID-19 pandemic has caused abrupt changes in global industrial structures. The acceleration of transition toward more digital and contactless economic activities, transformation of manufacturing into services and that of services into platforms have led to increased competition across industries. A green transition toward an eco-friendly and low-carbon economy is also taking place rapidly. These changes in the economic and industrial structures are more likely to place burdens on SMEs and middle market enterprises than they are to large companies. In this regard, there are also concerns about grim consequences in a post-pandemic era of failing to act preemptively now. Therefore, it is necessary to ensure that there are policies in place to help SMEs and middle market enterprises to more effectively respond to the structural changes taking place across industries. (Corporate Finance Platform) These changes also require a fundamental shift in ways corporate finance is handled in the financial industry. The current industrial classification used in the financial industry does not fully take into account rapid changes taking place in industries, technologies, etc. There are also limits and restrictions in the current system in terms of providing sufficient funds for businesses to support their attempts at transforming a business or exploring a new business area as financial institutions may lack sufficient understanding about the most recent industry trends or technolog
Feb 22, 2021
- FSC Introduces Guidelines on MyData Services and Establishes MyData Support Center
- The FSC introduced guidelines on MyData services on February 22, which contain details about the consumers data privacy rights, scope of data transfers, operational procedures, obligations for service providers and so on, as MyData businesses will begin to offer their services using standardized API beginning on August 4, 2021. In addition, MyData support center has been set up at the Korea Credit Information Services to facilitate a seamless operation for both service providers and consumers. The center will provide support for quick resolution of conflicts and consumer complaints through MyData web portal. Guideline Details I. Scope of Data Provision The guidelines specify the types of consumer credit and financial data that can be provided through MyData services from a range of financial sectors, such as credit finance and financial investment businesses, insurance businesses, credit card companies, electronic financial services, etc. A further expansion on the types of consumer data available for MyData will be reviewed and decided in the future. II. Protection of Consumer Rights The guidelines contain measures to ensure that consumers are giving consent to data transfer with sufficient awareness of their data privacy rights through the use of easy-to-understand language and visual contents while allowing freedom of consent, denial, withdrawal, etc. To strengthen data protection, MyData businesses will be required to make their service cancellation process easy and completely remove consumer credit data from their platform when cancellation occurs. MyData firms will be prohibited from offering excessive rewards as sales pitch to prevent excessive competition in the industry. For the purpose of data security management, MyData firms will be subject a set of specific data security standards and the suitability and vulnerability tests. III. Data Transfer Process First, data subject files a data transfer request at a financial institution after choosing specific ty
Feb 18, 2021
- FSC Designates Two More Financial Solutions as 'Innovative Financial Services'
- The FSC added two more financial solutions to the financial regulatory sandbox program on February 18, bringing the total number of innovative financial services to 139 since the sandbox program was launched on April 1, 2019. The FSC also made a decision to extend the designation and regulatory exemption period on five other previously selected innovative financial services. Overview of Newly Added Innovative Financial Services 1. A small-sum deferred payment service that allows consumers to make a payment on the remaining portion of the total charged amount after first using their online reward points based on a pre-determined individual deferred payment limit calculated according to the Alternative Credit Scoring System (Naver Financial, expected in Apr. 2021) 2. An online stock gift card service that allows consumers to purchase stock gift cards on easy-to-access e-commerce platforms and use them for trading in domestic and overseas securities markets (eBest Investment Securities, expected in Aug. 2021) * Please refer to the attachdd PDF for details.
Feb 15, 2021
- 3rd Korea Fintech Week to be Held in May
- The FSC announced its plans to hold the 2021 Korea Fintech Week from May 26 to 28 under the theme of fintech and sustainable financial innovation. The third annual global fintech expo will kick off its first day at Conrad Seoul with live streaming of onsite activities available online and then move on to exclusively virtual events for the second and third days. The offline to online (O2O) availability of diverse promotional, vocational, educational and networking programs and opportunities will help boost awareness on fintechs and accelerate financial innovation. Key Features (User Experience) More dynamic and engaging programs will be prepared for online visitors with real-time QAs and communication made possible. (Job Fair) Fintech job talks will be held to offer real-time QA opportunities to fintech job seekers. (Investment) More fundraising opportunities will be available for fintechs through IR and venture capital consulting programs. (Education) Online educational programs will be offered with certificates Registration Schedule Preliminary application for participating firms will be open from the third week of March and pre-registration will be available from the first week of May from the Korea Fintech Week website (www.fintechweek.or.kr/2021). Viewing is free for students and the general public. In November this year, the FSC plans to hold an additional global fintech expo offline if the coronavirus conditions are permissible. For more information, please contact the Fintech Center Korea via email at firstname.lastname@example.org or by phone at +82.2.6375.1541. * Please refer to the attached PDF for details.
Feb 09, 2021
- Digital Finance Meeting Discusses Ways to Improve Rules for Fintechs and Big Techs
- Vice Chairman Doh Kyu-sang held the 6th consultative body meeting on digital finance via teleconference on February 9 to discuss ways to improve rules for both fintechs and big techs and to examine areas for further improvements in the financial regulatory sandbox program. The following is a summary of Vice Chairman Dohs remarks. (Rules on Fintechs and Big Techs) Since October last year, the FSC has held talks with both fintechs and big techs on ten different occasions. Through these meetings, industry officials have suggested a total of seventy-four areas where regulatory reforms are needed. On fifty-two of them, the FSC will immediate take actions to improve the rules. On eleven others that are considered as mid- to long-term projects and require coordination with other ministries or further considerations for their impact on financial consumers, the FSC will continue to seek ways to make improvements. On the remaining eleven areas where it is deemed to be difficult to seek immediate change at the moment, the authorities will continue to closely monitor the trends to make improvements when conditions become permissible. On regulatory reforms to promote fintech innovation, the FSC will pursue the following policies. First, the FSC will work to create an environment where new digital businesses can be quickly launched and flourish. As many fintechs and platform service providers have requested, the authorities will work to provide strong support for launching new and innovative financial services through platforms. To this end, the FSC will ensure the launch of new innovative financial services through the regulatory sandbox program while working for a prompt enactment of the relevant amendments to the Electronic Financial Transactions Act. To build a strong foundation for the MyData industry, the FSC will promptly work to provide medium- and small-sized fintechs with support for their API data standardization and build a one-stop integrated MyData authentication sy
Feb 08, 2021
- FSC Selects Another Fintech as Designated Agent to Provide Financial Services
- The FSC selected Minds Lab as a designated fintech to provide financial services on behalf of Hyundai Marine Fire Insurance on February 5. Minds Lab will provide a one-stop automated loan processing service using artificial intelligence (AI) and voice recognition technologies. It will help reduce costs and save time while improving service standards. The FSC has made thirty-four such designations so far since May 2018. Application for the next round will be open from February 15 to April 30, 2021, with the results expected to be announced in July this year. * Please refer to the attached PDF for details.
Feb 04, 2021
- New Deal Funds Worth KRW200 Billion Agreed for Future Car and Industrial Digitalization
- FSC Chairman Eun Sung-soo visited Hyundai EV Stationin Seoul on February 4 and delivered congratulatory remarks at an MOU signing event for the promotion of investment cooperation in the areas of future car and industrial digitalization. MOU on Investment Cooperation The MOU highlights an agreement toward a mutual cooperation between the relevant industry entities, financial institutions and the New Deal fund operators (KDB and Korea Growth Investment Corp.) in creating KRW200 billion worth of feeder funds to be invested in the areas of future car and industrial digitalization. To this end, Hyundai Motor Group, the Korea Evaluation Institute of Industrial Technology (KEIT) and the Korea Institute for Advancement of Technology (KIAT) will collectively invest a total of KRW90 billion in New Deal funds in 2021. Over the next five years, the financial institutions will also make matching investments worth KRW1.1 trillion in New Deal funds. Summary of Chairmans Remarks Since the government first announced its plans to create the New Deal fund worth KRW20 trillion in September last year, a master fund was created on January 28 with fiscal investment in the amount of KRW510 billion. In January, fund managers submitted their applications with proposals in the amount of KRW9.7 trillion, which is well over three times the initial investment goal of KRW3 trillion for this year. Their proposals showed an appropriate distribution across all New Deal sectors and demonstrate the significance of digital and green industries in a post-pandemic era. The MOU signed today on investment cooperation between the relevant industry and financial officials is thus significant for the following reasons. First, in order to speed up the creation of New Deal funds, matching investments from the private sector are needed. With the MOU in place, we can expect to see a more speedy creation of feeder funds in the areas of future car and industrial digitalization. Second, in order to generate tangibl
Feb 04, 2021
- FSC Holds 1st Taskforce Meeting to Promote Role of Insurers in Health Care-related Services
- The FSC held the first taskforce meeting on promoting the role of insurance companies in providing health care-related services with the relevant ministry and industry officials on February 4. At the meeting, officials discussed major health care industry trends in overseas markets and the domestic health care market environment for insurance companies. To boost the effectiveness in operating the taskforce, the FSC will separately operate an advisory group and a working group to draw up and search for policy tasks. While working to accelerate a data convergence between the health care and financial industries, the taskforce will explore diverse areas to make improvements, such as expanding the use of digital health devices for insurance companies. * Please refer to the attached PDF for details.
Jan 27, 2021
- FSC Grants MyData Business Licenses to 28 Firms
- The FSC granted MyData business licenses to twenty-eight firms on January 27 as the authorities decided that they all satisfy the requirements set forth by the Credit Information Use and Protection Act. The approved entities include five banks, six credit finance businesses, one financial investment firm, one mutual finance business, one savings bank and fourteen fintechs. The approved entities will begin providing MyData services after setting up standard APIs by August 4, 2021, which will allow the provision of safer and more convenient MyData services. In order to ensure a smooth takeoff of the MyData services, the authorities will distribute a guideline in February that specifies details about the scope of data transfer, safe means of data transfer, measures for consumer protection, etc. Beginning in March, the FSC plans to begin another round of preliminary application process for those that wish to enter the MyData industry. * Please refer to the attached PDF for details.
Jan 27, 2021
- FSC Designates Additional 'Innovative Financial Service' for Regulatory Sandbox
- The FSC designated two more innovative financial service providers for its regulatory sandbox program on January 27, bringing the total number of such designation to 137 since launching the financial regulatory sandbox program on April 1, 2019. The newly designated service is a credit card service for underaged family members that allows parents to set the maximum usage limit as well as the places where it can be used (Samsung Card Shinhan Card). The service is expected to boost the convenience in small-sum financial transactions and promote responsible consumption habits among high school and middle school aged students. The service is expected to be available in June this year. * Please refer to the attached PDF for details.
Jan 19, 2021
- Public-private Joint Investment to Create KRW100 Billion Fund for Semiconductor Industry in 2021
- FSC Chairman Eun Sung-soo visited SK Hynixs Icheon campus on January 19 and delivered congratulatory remarks at a public-private joint investment agreement ceremony held for the mutual cooperation between SK Hynix, the Korea Development Bank, Export-Import Bank of Korea and NH Nonghyup Bank in raising a total of USD3 billion between 2021 and 2025. To promote a balanced growth of the countrys semiconductor industry and its ecosystem, SK Hynix, the KDB and KEXIM Bank also agreed to make contributions in creating a fund in the amount of KRW100 billion, which will be used for making investments in SMEs and middle market enterprises in the semiconductor industry. CHAIRMANS REMARKS Chairman Eun highlighted the significance of the joint investment agreement and stated that there should be continuous efforts at making investments in future-oriented projects. In this regard, Chairman Eun also touched upon the importance of a balanced growth between large companies and smaller sized firms that collectively make up the industrys ecosystem. To encourage private sector investments, Chairman Eun explained that the government will create New Deal funds in the amount of up to KRW4 trillion and provide New Deal financing support worth about KRW18 trillion through state-backed financial institutions lending support and investment programs. While funneling funds to the new growth sectors, Chairman Eun said that the government aims to select more than 400 innovative firms this year for providing comprehensive support package. * Please refer to the attached PDF for details.
Jan 13, 2021
- FSC Grants Preliminary MyData Business Licenses to Seven More Entities
- The FSC decided to grant preliminary MyData business licenses to seven more business entities on January 13. The seven approved firms are Viva Republica, Minwise Co, Coocon, Fintech Inc., Habit Factory, Standard Chartered Korea and SK Planet.For Kakao Pay, the application review is still ongoing.The FSC plans to announce the final license approval results in late January.* Please refer to the attached PDF for details.
Jan 06, 2021
- FSC Holds Talks on Boosting Innovation and Vitality in Financial Industry
- Vice Chairman Doh Kyu-sang held a teleconference meeting with experts from consulting firms and financial institutions on January 6 and discussed the financial industry’s outlook for this year while sharing opinions on policy suggestions.The following is a summary of Vice Chairman Doh’s opening remarks.In the wake of the coronavirus outbreak in 2020, the government promptly rolled out emergency stimulus programs at an unprecedented scale and the financial sectors contributed to the recovery effort through maturity extension, deferment of payments, rent cuts, etc.The year of 2021 is critical as we need to successfully overcome the pandemic while carrying out strategies for a post-pandemic future at the same time. We should continue to move forward with digital innovation in our financial industry while looking for sustainable ways to maintain soundness and generate profit.On the regulatory front, there have been remarkable progress and improvements for digital finance in the areas of contactless, platform and big data services. This year, the government will continue to work on improving rules and regulations in our administrative capacity to make financial rules and regulations more predictable and reasonable. Key suggestions from today’s discussions will be included in the FSC’s work plan for this year.* Please refer to the attached PDF for details.
Dec 22, 2020
- FSC Designates 15 More 'Innovative Financial Services' for Regulatory Sandbox
- The FSC added fifteen more financial solutions to the financial regulatory sandbox on December 22, bringing the total number of ‘innovative financial services’ to 135 since the launching of the financial regulatory sandbox program on April 1, 2019.OVERVIEW OF NEWLY ADDED ‘INNOVATIVE FINANCIAL SERVICES’1. A mobile food order platform within the existing mobile banking application that offers convenience and low-cost financial services to both registered small merchants and consumers (Shinhan Bank)2. A personal health condition rating service offering discounts to existing health insurance premiums (Grade Health Chain)3~5. Personal authentication and ID verification services using facial recognition technologies (Kakao Bank, Toss Securities, Toss Innovation)6. A contactless real-name verification service based on digital certification system (Coinplug)7. An online-based business insurance subscription service that allows an easier sign-up process (DB Insurance)8. A group insurance service offering coverages for small scale employers with less than five employees (Kyobo Life Insurance)9~11. Mobile gift card services using e-commerce platforms (Hana Life Insurance, Kyobo Life Insurance, etc.)12~14. Monthly housing rent payment services using credit cards (Samsung Card, Woori Card, Hyundai Card)15. A credit card reward points service that helps small merchants save on credit card transaction fees and offers them reward points on credit card sales amount on the next business day following credit card transaction (Shinhan Card)* Please refer to the attached PDF for details.
Dec 22, 2020
- FSC Grants Preliminary MyData Licenses
- The FSC decided to grant preliminary MyData business licenses to twenty-one financial institutions, fintechs and electronic financial businesses out of a total of thirty-five applicants on December 22. The approved entities were tested on six specific categories, such as the minimum capital requirement, data security capacity, appropriateness of business plan, shareholders’ financial background, board qualifications and professional expertise.For eight other applicants, application review is ongoing as they are asked to take supplemental actions to meet requirements.Aside from the approval process, the authorities are working on measures to strengthen consumer protection in MyData sector. The authorities plan to come up with a specific guideline in this regard in February 2021.* Please refer to the attached PDF for details.
Dec 21, 2020
- Open Banking Available from Mutual Finance & Securities Firms
- The FSC announced the availability of open banking services from five mutual finance businesses, the Korea Post and thirteen securities companies starting from December 22.During the first half of 2021, savings banks and credit card companies will also join the open banking system.In addition, from January 1, 2021, open banking inquiry fee levels for participating institutions will be reduced to one third of the previous levels.With more types of financial institutions joining the open banking system, it will help promote competition and improve consumer convenience.* Please refer to the attached PDF for details.
Dec 18, 2020
- Tech Financing Guildeline to Facilitate Effective Lending Support For Innovative SMEs
- The FSC announced the introduction of a new tech financing guideline, which outlines details about the specific target business sectors and relevant procedures of tech financing. The guideline will go into effect from January 2021.BACKGROUNDSince it was first introduced in January 2014, tech financing grew significantly as more banks and tech credit bureaus (TCBs) became interested in offering financing options to innovative SMEs based on their technological prowess and future growth potential. Until now, five tech credit bureaus and ten banks have been providing tech credit evaluation service using their own evaluation models. In order to strengthen the accountability and stability of tech financing and improve its qualitative standards, a guideline on tech financing has been established as follows.KEY DETAILS1) Setting up necessary infrastructure for tech financing- Require TCBs to set up a division specializing in tech financing and specify division members’ professional qualifications- Introduce a standardized TCB evaluation model to enhance consistency and stability- Establish an independent organization charged with inspecting the standard TCB evaluation model2) Providing support to SMEs with technological prowess and innovativeness- SMEs with innovative ideas in manufacturing, knowledge and content industries, tech-based environmental or construction sectors, new and renewable energy sectors, as well as those with proven records of technological prowess through patents, etc.3) Establishing clear procedures on tech financing- Provide specific guidelines on tech financing procedures for SMEs, banks, TCBs and Korea Credit Information Services- Make site inspections mandatory in principle with specific cases for exemption- Require tech credit evaluating institutions to set up internal inspection frameworks to ensure the appropriateness and fairness of their tech credit evaluation4) Recommending a set of professional rules and ethics for banks and TCBs- Promote
Dec 16, 2020
- FSC Plans to Promote Role of Insurers in Healthcare Industry
- The FSC announced its plans to expand the role of insurance businesses in the provision of non-medical healthcare services on December 16. The FSC will work to improve relevant regulations through consultative body meetings on digital finance and by setting up a taskforce to prepare more detailed plans in the first half of 2021.BACKGROUNDHealthcare and insurance share a common denominator in offering security to individuals, although the functional linkage between the two has been severed due to restrictions in regulation and limitations in technology. However, with the advancement of technologies in the areas of Internet-of-Things, big data and platforms, a convergence between healthcare and insurance services is increasingly becoming available. Amid an aging society and higher prevalence of chronic diseases, the newly emerging healthcare industry has received growing attention. As such, the FSC plans to pursue a mid- to long-term strategy of promoting the role of insurers in the provision of non-medical healthcare services, which will contribute to the overall improvement in the healthcare system.KEY MEASURESI. ALLOW INSURERS TO PROVIDE HEALTHCARE SERVICES TO GENERAL PUBLICCurrently, insurance companies are allowed to provide non-medical healthcare services only to their own coverage subscribers, such as personal health data management and fitness assistance platform services, as indicated by the guidelines issued by the Ministry of Health and Welfare. This service provision will be extended to the general public with the expectation of promoting diversity and quality of healthcare services while lowering insurance premiums in the long run.II. IMPROVE RULES ON SUBSIDIARIES FOR INSURANCE BUSINESSESCurrently, insurance companies are permitted to own shares of subsidiaries in the areas prescribed by the Enforcement Decree of the Insurance Business Act. However, due to a lack of specific provisions, there exist legal uncertainties with respect to whether insurers are
Dec 10, 2020
- 5th Digital Finance Meeting Unveils Plans to Improve Rules and Regulations
- Vice Chairman Doh Kyu-sang held the 5th consultative body meeting on digital finance on December 10 and discussed ways to improve rules and regulations for an ‘upward leveling’ of financial regulations for financial institutions, fintechs and big techs alike, which will promote competition and innovation for all.VICE CHAIRMAN’S REMARKSAmid significant changes taking place in the financial industry, fintechs are growing rapidly, big techs are entering financial markets and traditional financial institutions are actively pursuing digital innovation. In this process, the existing regulatory regime has not been able to sufficiently take into account the changing digital environment. There also have been concerns about the lack of fair competition and the need to apply same regulations for same functions. As such, the competition has become fiercer with growing uncertainties about the future.To promote communication and cooperation between different market players, the consultative body meeting on digital finance was established on September 10. A series of meetings with different market players since then helped to collect diverse opinions and suggestions. With the goal of ‘upward leveling’ of financial regulations for financial institutions, fintechs and big techs alike, the FSC has prepared plans to level the playing field and take into account the needs of different market players.KEY SUGGESTIONSA total of forty out of sixty-two suggestions (65%) have been accepted on the issue of regulatory arbitrage and digital transition, with fifteen others pending for mid- to long-term review.I. REGULATORY ARBITRAGE ISSUE- Expand opportunities for banks to operate platform business- Allow credit card companies to operate one-stop payment service business- Establish rules to oversee big techs’ platform sales activities- Allow financial companies to invest in and own shares of fintechs- Make data provision for MyData more equitable for banks and electronic financial bu
Nov 25, 2020
- FSC Holds Meeting on Future Outlook and Competitiveness of Financial Industry
- The FSC held a meeting on the future outlook and competitiveness of the financial industry chaired by Vice Chairman Doh Kyu-sang on November 25. A new twelve-member expert review committee has been set up to lead the future outlook and competitiveness assessment of the financial industry. It will focus on lowering entry barriers into the financial industry and building financial infrastructures appropriate for the 4th industrial revolution era.VICE CHAIRMAN’S REMARKS(CHANGING ENVIRONMENT TASKS) The financial industry in Korea has continued to grow over the past decade. The size of Korea’s financial and insurance industry rose from 5 percent of GDP in 2009 to 5.6 percent of GDP in 2019, and the market capitalization of Korea’s capital markets rose to the twelfth in the world. However, there need to be more efforts to bring about qualitative improvements in the areas of global competitiveness and digital innovation. In response to an aging population and the low-rate and low growth environment, it is necessary to look for innovative solutions. With AI, big data and platform-based services being introduced by fintechs and big techs, it is necessary to accelerate digital transformation and gain consumer trust. The 4th industrial revolution has led to the blurring boundaries between financial and non-financial services, the unbundling of manufacturing and sales and the acceleration of the big blur where consumer experience is becoming ever more important.(ASSESSING THE COMPETITIVENESS OF FINANCIAL INDUSTRY) The future outlook and competitiveness assessment should focus on forecasting the future of the financial industry and looking for appropriate strategies based on long-term perspectives. It should offer an objective analysis on the current status of Korea’s financial industry, while checking to see whether the current regulations on entry and sales requirements are appropriate for the advancement of digital finance and innovation.FUTURE OUTLOOK COMPETITIVENESS