Press Releases - Financial Services Commission

Press Releases

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Jun 19, 2023

FSC Concludes Series of Meetings on Promoting Overseas Expansion of Korean Financial Businesses

The Financial Services Commission held a meeting with the Financial Supervisory Service, relevant industry groups and financial institutions on June 19 and had discussions on ways to promote overseas expansion of domestic financial businesses and seek regulatory overhaul. Since launching a taskforce on the globalization of financial industry in March this year, authorities held a series of seminars and meetings with different sectors and todays meeting is the final session concluding what have been discussed thus far. At the beginning of the meeting, FSC Vice Chairman Kim So-young delivered opening remarks and outlined the FSCs plan to improve regulations in the following four areas(a) acquisition of a foreign subsidiary to bolster global competitiveness, (b) raising funds for an overseas subsidiary by the parent company, (c) flexible application of domestic use only regulations on overseas branches, and (d) removing excessive redundancy in disclosure and reporting duties and switching the current ex ante reporting requirement to ex post reporting The FSC plans to draw up and announce in July specific regulatory reform measures in support for domestic financial companies business expansion overseas. To help resolve the difficulty of financial companies in getting in touch with local financial regulatory agencies abroad and to address the shortage of information available on foreign markets, authorities also introduced measures to strengthen cooperation networks with relevant authorities for overseas expansion of domestic financial businesses. * Please refer to the attached filefor details.
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Jun 15, 2023

FSC Holds Financial Cooperation Forum with Thailand and Attends IOSCO Annual Meeting

The Financial Services Commission held the Korea-Thailand Financial Cooperation Forum and attended the 48th annual meeting of the International Organization of Securities Commission (IOSCO) held in Bangkok, Thailand on June 12-15. Korea-Thailand Financial Cooperation Forum The FSC held the Korea-Thailand Financial Cooperation Forum with the Bank of Thailand and the Council on International Financial Cooperation on June 13. The forum was attended by about a hundred regulatory authorities and relevant officials from both countries, and the participants held discussions on (a) the current status of financial markets and banking industry in both countries and (b) ways to increase bilateral cooperation on financial innovation and development. At the forum, Securities and Futures Commission (SFC) Standing Commissioner Kim Jeong-kag of the FSC delivered congratulatory remarks and talked about the importance of bilateral cooperation between the two countries. In his speech, Standing Commissioner Kim said that Koreas experience with online-only banks, open banking and financial MyData services can offer valuable examples regarding digital transformation of the financial sector and that Korean financial institutions are very much willing to participate and contribute to Thailands virtual banking initiative. IOSCO Annual Meeting The FSC and the FSS attended the 48th IOSCO annual meeting held on June 12-15. At this years meeting, the member countries held discussions on various capital market issues such as sustainable finance, managing fund liquidity risks, private equity financing, leveraged loans and collateralized loan obligations (CLOs). Regarding the issue of the IOSCO Board officially endorsing the sustainability disclosure standards prepared by the International Sustainability Standards Board (ISSB), the Korean delegation agreed with the suggestion for endorsement in principle but added that due to different regulatory and industry preparation in each member country, th
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Jun 12, 2023

FSC Plans to Improve Accounting Rules to Enhance Transparency and Stability

The Financial Services Commission announced a plan to make improvements to a set of key accounting rules on June 12, taking into account a comprehensive set of factors discussed and recommended by academic and industry experts. Since the accounting reform of 2017 (regarding the Act on External Audit of Stock Companies), there have been both positive and negative opinions in the past five years about the newly introduced accounting rules such as the periodic designation of an external auditor. Compared to the pre-reform period, experts generally see that the reform measures have helped to improve accounting transparency. However, businesses have called for making improvements to the system as they have been questioning whether the benefit outweighs the cost in introducing the reform measures. Against this backdrop, the FSC hasprepared the following measures to improve the accounting rules introduced five years ago. Lowering burden of external audit on internal accounting control system The cost of stock companies for setting up and maintaining an internal accounting control system is estimated to be about 90 percent of the cost paid out for audit fees. This sharp rise in their accounting costs has presented difficulties for many businesses. Meanwhile, a study by Korea Accounting Association finds that for stock companies with less than KRW2 trillion in assets, the relationship between the effectiveness of having a separate internal accounting control system and boosting their accounting transparency remains not so clear. Thus, authorities will postpone the requirement of external audit on the consolidated internal accounting control system for small- and medium-sized stock companies (those with assets less than KRW2 trillion) for five years (from 2024 to 2029). For those with assets worth KRW2 trillion or more, the external audit requirement will be implemented as scheduled starting from this year, but those asking for a postponement on their consolidated internal ac
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Jun 12, 2023

2023 Korea Fintech Week Scheduled to be Held from August 30 to September 1

The annual global fintech expo, 2023 Korea Fintech Week, is scheduled to be held from Wednesday, August 30 to Friday, September 1 at Dongdaemun Design Plaza (DDP) in Seoul this year. The 2023 Korea Fintech Week will be held on the theme of the new wave of fintech, providing a venue for fintech businesses, financial companies, big tech platforms and investors to come together to share some of the latest fintech trends, pitch innovative business models and promote investment in the fintech industry. A variety of programs including fintech exhibitions, theme-based seminars and events for first-hand fintech experience will be available for participants. In order to actively support domestic fintech firms business expansion in overseas markets, this years Korea Fintech Week will have an expanded size of global hall to promote participation by many investors, accelerators and venture capitalists from many different countries. In addition, a collaboration hall will be newly set up for operation this year to encourage participation by the entire domestic fintech ecosystem including local government bodies, relevant organizations and universities. Also, a variety of helpful programs and events including a global fintech talk with a foreign influencer, fintech idea contest, finance-themed musical and fintech job mentoring and career consulting will be available to help visitors to learn about various fintech services and trends in an easy and fun way. It is expected that the 2023 Korea Fintech Week will provide vast opportunities to expand and reinvigorate Koreas fintech ecosystem. * Please refer to the attached filefor details.
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Jun 09, 2023

Household Loans, May 2023

The outstanding balance of household loans (preliminary) across all financial sectors went up KRW2.8 trillion in May 2023, which rose for the second consecutive month. Financial authorities will closely monitor trends in household debt and work to ensure stable management of household loans. (Overall) Household loans across all financial sectors rose KRW2.8 trillion in May 2023, but the year-on-year growth rate edged down 1.4 percent, showing a continuous trend of declining balance on year since November 2021. (By Type) Mortgage loans grew at a faster pace for the third consecutive month and other types of loans declined at a slower rate for three month in a row. Mortgage loans went up KRW3.6 trillion, despite a decline of KRW0.6 trillion in the nonbanking sector, as banks saw an increase of KRW4.3 trillion. Other types of loans fell KRW0.8 trillion as both the banking and nonbanking sectors saw a drop of KRW0.02 trillion and KRW0.8 trillion each. (By Sector) Household loans rose in the banking sector but fell in the nonbanking sector. Household loans in the banking sector increased KRW4.2 trillion in May, edging up for the second straight month. Mortgage loans from banks grew KRW4.3 trillion, despite a drop in jeonse loans (down KRW0.6 trillion), as the volume of policy mortgage loans (up KRW2.8 trillion), general individual mortgage loans (up KRW2.0 trillion) and group lending for new apartment subscription (up KRW0.1 trillion) increased. Other types of loans in the banking sector declined (down KRW0.02 trillion) at a slower pace compared to a month ago (down KRW0.5 trillion) as credit loans expanded from a fall in the previous month (down KRW0.6 trillionup KRW0.03 trillion). Nonbanks saw a drop of KRW1.4 trillion in household loans with slight increases in the insurance (up KRW0.4 trillion) and specialized credit finance (up KRW0.4 trillion) sectors but declines in mutual finance (down KRW2.2 trillion) and savings banks (down KRW0.03 trillion). The pace of declin
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Jun 08, 2023

Authorities Hold 1st Meeting on Benchmark Rate and Short-term Money Market

The Financial Services Commission held a meeting with the Bank of Korea, the Financial Supervisory Service and relevant industry groups and institutions to monitor how domestic financial institutions are preparing for a transition away from LIBOR (London interbank offered rate) and discuss issues surrounding the operation of domestic financial benchmark rates. In coordination with relevant institutions and financial companies, the government has been working to make a transition away from LIBOR, responding to the European Unions Benchmark Regulation (BMR) compliance and participating in the global benchmark rate reform efforts. The following is an overview of these efforts so far. First, all financial contracts based on non-USD LIBOR, which ceased to be published in 2022, were successfully converted, and financial contracts based on LIBOR, which will be discontinued from July 2023, are being converted to an alternative rate such as secured overnight financing rate (SOFR). As of the end of May 2023, about 95.3 percent of domestic financial institutions contracts have made this transition. Second, the government enacted the Act on the Management of Financial Benchmarks, which became effective in November 2020 and reflects international standards on benchmark rate reform, to strengthen credibility of domestic benchmark rates. In order to ensure a seamless utilization of domestic benchmark rates (Korea overnight financing repo rate and certificate of deposit rate) in the European Union, authorities have been working with EU counterparts to get an approval for congruity. Third, in February 2021, authorities selected the Korea Overnight Financing Repo Rate (KOFR) as Koreas new risk-free reference rate (RFR) and designated it as a critical benchmark rate under the Act on the Management of Financial Benchmarks. The KOFR is being published by the Korea Securities Depository (KSD) since November 2021. Currently, three-month KOFR futures and exchange traded funds (ETFs) have b
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Jun 08, 2023

FSC Holds Meeting to Monitor Soft-landing of Maturity Extension and Payment Deferment Support

FSC Vice Chairman Kim So-young presided over a meeting with the Financial Supervisory Service and relevant financial industry groups on June 8 to review current status of the efforts to soft-land the loan maturity extension and payment deferment program. The maturity extension and payment deferment program was introduced in the wake of the coronavirus pandemic to support SMEs and small merchants experiencing temporary liquidity problems. Since it was first launched in April 2020, the availability of support program was extended every six months. Currently, it is available under the measures to soft-land loan maturity extension and payment deferment for self-employed and SMEs, the fifth such six-month extension plan announced in September 2022.In accordance with the measures announced in last September, maturity extension is available for three years (until September 2025) and payment deferment is available until September 2028 according to individual payment plans submitted by borrowers. Specific terms of their payment plans (interest-only period, installment payment plan, etc.) are drawn up in consultation with each financial institution. Some of the key statistics of the maturity extension and payment deferment program as of the end of March 2023are as follows. Compared to the end of September 2022, the amount of loan balance and the number of borrowers receiving support declined by about KRW15 trillion and 46,000, respectively, as shown in the table below. This shows a smooth landing of the support program as borrowers are recovering payment capabilities due to improving business conditions, availability of low interest rate refinancing loans, debt adjustment support and so on. At the meeting, Vice Chairman Kim So-young said that authorities will work to ensure a soft-landing of the support program and continue to operate a help center at the FSS to make sure that borrowers can seek consultation on their payment plans, debt adjustment and the availability of othe
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Jun 08, 2023

KRX Derivatives Market to Open 15 Minutes Early Starting from July 31

Financial authorities announced that the derivatives market, which currently opens at the same hour as stock markets, will open fifteen minutes early at 8:45 am beginning on July 31. The Financial Services Commission, the Financial Supervisory Service and the Korea Exchange announced the plan at a seminar held on the topic of strengthening the global competitiveness of financial investment business on June 8. The need and the plan for early opening was discussed at the second such seminar held in April this year. At that time, FSC Vice Chairman Kim So-young said that the derivatives markets early opening will help ease price volatility in stock market at opening hours and improve global consistency. Since its launch in 1996, the opening hour for derivatives market has remained the same as the opening hour of stock markets. Prices determined in the derivatives market reflect various expectations from market participants about the future prices of underlying assets (price discovery function). However, unlike in overseas markets, Korea has the same opening hour for both the spot market and futures market, which has made it difficult for stock investors to discover prices of derivatives products during the early hours of stock trading sessions. Also, due to the same opening hour, price volatility has been high in stock market especially at the time of market opening (for about fifteen minutes) as adjustments needed to take place in the futures market prior to the stock market opening are directly reflected in stock prices. In this regard, to help ease stock markets early-hour price volatility, financial authorities and the KRX plan to move up the derivatives markets opening hour fifteen minutes from 9:00 am currently to 8:45 am in line with international standards. Thus, the normal trading hours will be extended by fifteen minutes (from 9:00~15:45 currently to 8:45~15:45) and the single-price auction hours will be reduced by fifteen minutes (from 8:30~9:00 currently to
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Jun 05, 2023

Foreign Investor Registration Requirement to be Abolished in Korea

The government approved a revision bill of the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) abolishing the foreign investors registration requirement at a cabinet meeting held on June 5. The foreign investor registration system, which has been in place for about three decades since 1992, will be abolished starting from December 14 this year, six months after promulgation of the revised law which is expected to be on June 13. Under the foreign investor registration system, foreign investors had to register with the Financial Supervisory Service (FSS) prior to investing in locally listed securities (stocks, bonds, etc.). For foreign investors, opening an investment account at a securities firm was possible only after registering with the authority and being assigned a registration certificate (foreign investor ID). As this process can be time-consuming and requires much paperwork, this rule was pointed out as a significant barrier for foreign investors in investing in Korean stock markets. Moreover, this kind of registration requirement for foreign investors is not being implemented in major advanced economies such as the U.S. and Japan. Thus, from the perspective of making Korean regulations more consistent with global standards, global investors have made continuous calls for the need to change this rule. Introduced in 1992 to manage foreign investors maximum investment limit, the foreign investor registration system has been in place for the past three decades without much change despite the fact that the foreigners investment limit was abolished in 1998 in principle, leaving only 33 items under the authorities watch for foreigners total holding limit and two items for foreign individual holding limit out of some 2,500 listed companies currently. Once the revised Enforcement Decree of the FSCMA takes effect, foreign investors will be able to open investment accounts at securities firms without having to go through a prior
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Jun 01, 2023

FSC Holds Meeting to Monitor Progress of Real Estate PF Market Normalization

The Financial Services Commission held a meeting on June 1 to monitor progress in the normalization of the real estate project finance (PF) market along with officials from the Financial Supervisory Service, Creditors Coordination Committee, major financial holding groups and relevant policy financial institutions. As of the end of May 2023, a total of 30 real estate development projects have become subject to the assistance of the real estate PF lending institutions consortium agreement. Among them, business normalization is under way for 19 projects through provision of rollback on acceleration clause, new funds, deferment of interest payments and maturity extension. At the meeting, officials also went over the status of the support programs already announced and being provided by policy financial institutions such as business guarantees and policy finance support being offered by the Korea Housing Urban Guarantee Corporation (HUG) and Korea Housing Finance Corporation (HF), as well as KRW1 trillion worth of funds managed by Korea Asset Management Corporation (KAMCO). To support a seamless transition from short-term bridge loans to PF loans, the government already announced its plan to provide business guarantees worth KRW15 trillion through HUG and HF until the end of this year. As of May 30, the policy financial institutions provided a total of KRW6.01 trillion (KRW3.34 trillion by HF and KRW2.67 trillion by HUG) in support of the normalization of real estate projects. In addition, the special guarantee program set up to help alleviate anxieties in refinancing PF-ABCPs (asset backed commercial papers) provided a total of about KRW1.211 trillion (KRW0.12 trillion by HF and KRW1.914 trillion by HUG). To help ease the liquidity burden of regional real estate PF sites outside the Seoul metropolitan area and small- and medium-sized construction firms, the Korea Development Bank (KDB), Industrial Bank of Korea (IBK) and Korea Credit Guarantee Fund (KODIT) plan to prov
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May 31, 2023

FSC Announces 6th Financial Hub Policy

The FSC held the 49th meeting on promoting financial hubs in Korea on May 31 and decided on the 6th financial hub policy for 2023-2025. At the meeting, FSC Chairman Kim Joo-hyun delivered opening remarks and discussed some changes that took place in the global financial environment over the past three years. In this regard, Chairman Kim said that compared to the year 2020 when the 5th three-year plan for promoting financial hubs in Korea was formulated, todays global financial environment is experiencing rapid changes amid digital transformation and spread of sustainable finance. In this regard, Chairman Kim stressed that how we respond to these changes will determine the competitiveness of global financial hubs. As such, the 6th three-year plan to promote financial hubs in Korea contains the following four key task areas which will allow the government and the financial sector to quickly respond to the changing global financial environment and actively make use of the areas where the Korean financial industry has a comparative advantage. a) Continue to seek innovation in financial regulations and boost support for fintech businesses to improve the global competitiveness of Korean financial companies amid digital transformation. b) Ensure establishment of relevant infrastructure to be able to make the most use of the changing trends in financial sector such as digital finance and sustainable finance. c) Pursue bold regulatory reforms to help increase foreign investors investment in domestic capital markets and alleviate factors associated with the so-called Korea discount. d) Make utmost use of the financial industry globalization taskforce to provide active support for domestic financial companies business expansion overseas and to create synergetic effects with the efforts to promote foreign financial companies entry in domestic market and the Seoul and Busan metropolitan governments own financial hub development strategies. At todays meeting, the Seoul Metropolit
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May 30, 2023

Online One-stop Loan Transfer System Available

The FSC announced that financial consumers will be able to make a switch from their existing credit loans to loans offering more favorable borrowing conditions using their smartphones without having to visit a branch office of financial institutions beginning on May 31. Establishing an online one-stop loan transfer system has been a key policy agenda of this administration to help alleviate peoples interest payment burdens and promote digital transformation in the financial sector and competition between banks. In this regard, the FSC has been closely working with the Financial Supervisory Service, the Korea Financial Telecommunications Clearings Institute, major financial companies and fintech businesses to launch an online one-stop loan transfer system. In particular, prior to its launch on May 31, authorities have closely looked into ways to improve user convenience and guarantee stability and security of the system. Beginning on May 31, consumers will be able to use their smartphone apps (MyData-enabled loan comparison platform app or major financial company apps) to search for loans offering better borrowing terms and make a switch from their existing credit loans issued by 53 financial institutions (19 banks, 18 savings banks, 7 credit card companies and 9 specialized credit finance businesses). The online one-stop loan transfer app service will be available during the banks operating hours from 9:00 am to 16:00 pm on business days. Consumers can use the loan transfer service for their existing credit loans of up to KRW1 billion issued by 53 financial companies. From the time of downloading a mobile app until completing the verification of result, the service usage time is estimated to be around fifteen minutes, which is significantly shorter than at least two business days it took for consumers to visit the branch office of two financial institutions previously. The loan conditions calculated for consumers will be based on the same lending standards (maximum
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May 30, 2023

Authorities Plan to Overhaul Rules on CFD Trades while Restricting New Transactions for Three Months

The Financial Services Commission held a meeting with the Financial Supervisory Service, the Korea Exchange and the Korea Financial Investment Association on May 26 and held discussions to finalize a set of measures intended to strengthen regulations on trading of contracts for difference (CFDs). The measures include (a) enhancing transparency in the provision of information on the actual type of CFD investors and investment balances by item, (b) closing loopholes to prevent regulatory arbitrage by including the amount of CFDs provided in the securities firms maximum credit extension limit, (c) requiring individual investors applying for the qualified professional investor status to go through an in-person (including video call) verification process, and (d) establishing a new investment requirement for over-the-counter (OTC) derivatives transactions such as trading of CFDs. Enhancing transparency in provision of relevant investment information To help investors make more rational decisions about their CFD investments, authorities will improve the system to ensure the provision of more appropriate investment information. Even though those making investments in CFDs are mostly individual retail investors (making up about 96.5 percent), currently, when securities firms submit stock transaction orders following retail investors CFD trading, the investor type is currently marked as institutional investor when orders are submitted by a domestic securities firm or as foreign investor when orders are submitted by a foreign securities firm. This has created the problem of misrepresenting the flow of investment funds into particular investment items by institutional and foreign investors. In order to prevent this sort of misunderstanding by market participants, for stock transactions resulting from CFD trading, actual investor type (e.g., individual investor) will be recorded. In addition, as in the case of credit loans, the total and item-by-item CFD balances will be disclo
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May 25, 2023

FSC Decides to Activate CCyB Requirement for Banks and Bank Holding Groups from May 2024

The FSC decided to increase the countercyclical capital buffer (CCyB) requirement for banks and bank holding groups to one percent beginning on May 2024 at the 10th regular meeting held on May 24. The decision is a follow-up measure for the plan to improve the prudential regulations in the banking sector discussed at the third working group meeting of the taskforce on improving the management and operating practices of banks and banking system held on March 15. CCyB is an additional capital buffer requirement (within zero to 2.5 percent of risk-weighted assets) which takes into account the effects of procyclicality following credit supply on the financial system and the real economy. Since its introduction for domestic banks in 2016, CCyB has remained at around zero percent. The FSCs decision to increase the CCyB requirement to one percent takes into account comprehensive factors. First, even though the growth of household credit slowed down amid interest rate hikes, credit growth has remained high in the corporate sector. When looking at both the major total credit-to-GDP gap indicator and the complementary total credit gap indicator, there are strong signs for activating CCyB. Moreover, at the end of 2022, domestic banks Tier 1 common equity ratio was 13.50 percent (12.57 percent when including bank holding groups), which was higher than the regulatory ratio of 7.0 to 8.0 percent but fell slightly compared to 13.99 percent at the end of 2021 due to interest rate hikes and sharp rises in currency exchange rates. Also, as domestic banks net income in 2022 rose to KRW18.5 trillion (up KRW1.6 trillion y-o-y), it is deemed that banks are capable of setting aside additional capital. The FSC decided that it is necessary to preemptively require banks to build up capital to improve their loss absorbing capacity against the backdrop of macroeconomic uncertainties at home and abroad, potential growth of financial risks and the possibility of actually accruing expected losses
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May 25, 2023

Authorities Plan to Preemptively Respond to Real Estate PF Risks of Securities Firms

The Financial Services Commission and the Financial Supervisory Service announced measures to preemptively respond to risks for securities firms related to real estate project finance (PF). Based on the improved market conditions, the measures are aimed at minimizing risks related to securities firms exposure to PF and avoid a repeat of last years market disruption. Background In the second half of last year, a sharp rise in CP rates caused by short-term money market crunch made it difficult to refinance real estate PF-ABCPs backed by securities firms, and this has subsequently increased liquidity risk across the securities industry and spread more anxiety throughout financial markets. To stem further spread of market jitters, the financial authorities actively responded to the crisis. Along with the purchase of corporate bonds and CPs through the Korea Securities Finance Corporation and the Korea Development Bank, authorities provided KRW1.8 trillion in liquidity jointly with the securities industry to purchase PF-ABCPs and issued an administrative interpretation for securities firms to help reduce refinancing demand for PF-ABCPs. While real estate PF-related risks of securities firms have been kept at a manageable level with money market conditions being gradually stabilized, there still exist risk factors in the event of deteriorated market conditions. The delinquency rate of real estate PF loans by securities firmsis expected to continue to rise amid uncertainties over interest rate moves in global financial markets. The size of PF-ABCP guarantees remains similar to that at the end of last year. Against this backdrop, the FSC plans to take preemptive measures jointly with the securities industry to mitigate risks related to real estate PF and review how risk weights are applied when calculating securities firms net capital ratios (NCRs) to ensure their PF-related risks are properly managed in accordance with actual risks. Measures 1. Maturity Mismatch to be Addr
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May 23, 2023

Authorities Hold Joint Conference and Pledge to Stamp Out Unfair Trading Activities in Capital Markets

The FSC held a joint conference on May 23 with the Financial Supervisory Service, the Korea Exchange and Seoul Southern District Prosecutors Office on the topic of stamping out unfair trading activities in capital markets. The conference was attended by experts from academia and research institutions. The heads of the FSC, FSS, KRX and the prosecutors office all agreed to boost inter-agency cooperation and expressed strong willingness to root out unfair trading activities in capital markets. The conference featured presentations on (a) ways to diversify sanctions on unfair trading activities, (b) measures to strengthen early detection mechanisms, (c) the KRXs handling of recent stock price manipulation cases and ways to improve in the future and (d) an overview on the current status of unfair trading activities in capital markets and how to handle from a judicial perspective. The following is a summary of FSC Chairman Kim Joo-hyuns opening remarks. Summary of FSC Chairmans Remarks In the wake of the recently uncovered unfair trading activities in our capital market and their damaging effects, relevant authorities have come together today to collectively seek measures to strengthen our response to fraudulent activities in capital markets. First, regarding the recent stock price manipulation cases, a joint investigation team made up of officials from the prosecutors office, the FSC and the FSS has already been set up, and it has been expanding its scope of investigation to all areas of suspicion. By thoroughly investigating and identifying illegal activities, authorities will make sure that those suspected of breaking laws are brought to justice. Second, authorities will promptly seek regulatory improvements in the current CFD (contract for difference) trading system on a separate track from the ongoing investigation. The improvement measures will include (a) providing more accurate investment information to investors, (b) resolving regulatory arbitrages vis--vis cred
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May 22, 2023

FSC Vice Chairman Visits Kyrgyzstan to Promote Cooperation in Financial Infrastructure Development

FSC Vice Chairman Kim So-young visited Kyrgyzstan on May 18-19 and attended the opening ceremony of a Korean financial companys local subsidiary and the business agreement ceremony on advancing Kyrgyzstans payment infrastructure. BNK Finance opening ceremony in Bishkek On May 18, Vice Chairman Kim attended the opening ceremony of BNK Capitals local subsidiary (BNK Finance) in Bishkek, Kyrgyzstan. As BNK Capitals entry in Kyrgyzstan marks the first such establishment by a Korean financial company, Vice Chairman Kim expressed his hope for its success in localization and building trust with local consumers and said that he expects the company to play a crucial role in laying a bridge between Korea and Kyrgyzstan and facilitating more Korean financial companies to expand their businesses to Kyrgyzstan in the future. Business agreement on advancing Kyrgyzstans payment infrastructure On May 19, Vice Chairman Kim attended the business agreement ceremony held between a Korean financial company and a fintech (BC Card and Smartro) and Kyrgyzstans public institution (Interbank Processing Center) for advancing Kyrgyzstans payment infrastructure. In an interview held with Kyrgyzstans state media at the agreement ceremony, Vice Chairman Kim said that he hopes that cooperation in transferring Koreas financial payment technology can contribute to the development of an advanced payment ecosystem in Kyrgyzstan. In the future, Vice Chairman Kim said that he hopes the two countries can expand cooperation in financial infrastructure development and increase exchange of relevant authorities. The business agreement on financial payment infrastructure with Kyrgyzstan marks the first such agreement with a Central Asian country, and this will help expand more opportunities for other Korean financial companies to expand their business activities abroad in Central Asia. The FSC plans to continuously engage with financial sectors and actively seek ways to more effectively support domestic finan
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May 18, 2023

Taskforce on Financial Data Holds Kick-off Meeting

The FSC launched a taskforce to improve regulations on financial data on May 18 with officials from financial companies, fintechs, private sector experts and relevant institutions participating. The taskforce aims to lay groundwork to promote data-driven innovation in financial sectors, strengthen the competitiveness of domestic financial industry and help to resolve the challenges faced by small- and medium-sized startups and venture businesses. After having a series of taskforce meetings, authorities plan to draw up and announce specific measures for improving rules on financial data in the third quarter of this year. The following are some of the key task items discussed at the meeting. Facilitating use of pseudonymized data by small- and medium-sized fintechs - Review ways to have data specializing institutions to provide support for consulting on data pseudonymization and assessing the appropriateness of pseudonymized data for small- and medium-sized fintech businesses. - Consider ways to develop a data hub network equipped with adequate security functions such as managing data transfer history to help resolve challenges faced by small- and medium-sized fintech businesses and support data transactions and use of pseudonymized data in safe ways. Providing support for data convergence - Review ways to safely allow the use of a certain value of CI (connecting information) as the generative data of combination key to help lower the time and cost of data convergence and improve the quality of converged data. Promoting expanded use of synthetic data - Establish a guideline (for instance, for how to determine the anonymity of data) to ensure that synthetic data can be utilized in safe and effective ways. - Set up a data library for AI in financial sectors which will allow the converged (pseudonymized) data to be reused. The FSC will regularly hold working group meetings to continue to engage with relevant parties and seek areas requiring improvements. Based on these d
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May 18, 2023

FSC Vice Chairman Highlights Mutual Cooperation with Central Asia during Visit to Uzbekistan

FSC Vice Chairman Kim So-young attended the Korea-Uzbekistan fintech associations MOU (memorandum of understanding) signing ceremony as well as a joint seminar hosted by both countries banking associations during his visit to Uzbekistan on May 17. Korea-Uzbekistan fintech association MOU On May 17, Fintech Center Korea and Fintech Association of Uzbekistan signed an MOU to promote mutual cooperation. The fintech scene in Uzbekistan is still at a formative stage and Koreas fintech businesses are expected to help make significant contributions in sharing their business knowhow and experience. The Korean fintech businesses attending the MOU signing ceremony introduced their blockchain-based payment and certification solution technologies to their Uzbek counterparts and had discussions on possibilities of expanding their businesses to Central Asia in the future. Seminar hosted by Korea Federation of Banks and Uzbekistan Banking Association The Korea Federation of Banks and the Association of Banks of Uzbekistan hosted a joint seminar on May 17 to share Koreas digital infrastructure-backed financial and fintech industry experience and relevant policy and regulatory issues. The seminar was attended by Uzbekistans financial regulatory agency and financial companies and it provided an opportunity to broaden communication and exchange between the Korean financial companies doing business in Uzbekistan and the local officials. FSC Vice Chairman Kim So-young delivered a keynote address at the seminar and spoke about ways to promote financial cooperation between Korea and Central Asia. In particular, Vice Chairman Kim spoke about the potential synergy effects of Korean financial companies entering markets in Central Asian countries. Other speakers at the seminar also discussed issues regarding Koreas financial data infrastructure, financial regulatory sandbox program and credit information system. On the second leg of his trip, Vice Chairman Kim will visit Kyrgyzstan to attend
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May 17, 2023

FSC Chairman Speaks about Opportunities and Challenges in Embracing AI in Financial Sector

FSC Chairman Kim Joo-hyun attended a seminar on boosting the competitiveness of artificial intelligence (AI) in financial sectors hosted by Korea Credit Information Services on May 17 and delivered congratulatory remarks. At todays seminar, experts from both public and private sectors shared key trends of AI usage in financial sectors and discussed policy strategies to boost the competitiveness of the financial industry. The following is a summary of FSC Chairman Kims remarks. Summary of FSC Chairmans Remarks The development of hyper-scale, generative AI has recently put a new spotlight on the potential of AI. Investment in AI and its usage have been growing in diverse areas where AI can be put to use to help increase convenience for consumers and make financial companies core functions more efficient. At the same time, it is also crucial to consider ways to effectively respond to situations of AI failures or digital herding. Financial institutions are strongly encouraged to invest in AI and make use of the technology to enhance the global competitiveness of domestic financial businesses. The FSC has been working to embrace the use of AI in financial services and will continue to provide active support in this regard. So far, authorities have introduced a number of guidelines on AI, for example, on using and developing AI in financial sectors, verifying AI-based credit scoring models and ensuring security in AI-based financial services. Going forward, first, the FSC plans to establish a data library for AI in financial sectors and designate more data specializing institutions to facilitate big data analytics. Second, the FSC will work to improve the regulatory environment on financial data to promote an expansion of new AI-based services. Lastly, the FSC will set up a testbed for AI in financial sectors and prepare a guideline on explainable AI (XAI) with a goal to help increase confidence in AI-based financial services. The FSC will work to ensure that the specific
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