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.
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Apr 15, 2022
- FSC Introduces Improvements to Cloud Computing and Network Separation Rules in Financial Sector
- The FSC unveiled its plans to improve regulations on cloud computing and network separation in financial sectors on April 14. The financial industry has been raising concerns about difficulties in adopting and using new digital technologies as a result of excessive regulations on cloud computing and network separation. Therefore, in order to support the financial sectors efforts for digital transformation in a stable manner, the authorities have introduced a set of measures to improve regulations on cloud computing and network separation. On cloud computing, the changes will focus on (a) clarifying the scope (and types) of work that can make use of cloud computing, (b) overhauling the usage process to remove redundancies and similarities and (c) making a transition from the current prior reporting requirement to ex post facto reporting. On network separation, the uniform application of the network separation rules will be eased in stages starting with the development and test servers. Background The acceleration of digital transformation in financial services has been pushing up demand for new digital technologies such as cloud computing, big data analytics and artificial intelligence (AI). However, there have been continuous complaints from the industry that the current regulations on data security in the financial sector regarding cloud computing and network separation have been too strict, thereby hindering the adoption and use of new digital technologies. In order to address this issue, after taking into account various opinions from the financial industry,the FSC has prepared the measures for improving regulations on the use of cloud computing and network separation to promote digital innovation in the financial industry. Overview of Current Regulation on Cloud Computing and Network Separation I. Regulation on Cloud Computing (Usage Status) The financial sector has thus far been using cloud computingfor back office (non-essential types of work) purposes includi
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Apr 13, 2022
- FSC Announces Screening and Licensing Plan for MyData Service Providers in 2022
- The FSC announced this years screening and licensing plan for financial MyData service providers on April 13. The authorities will continue to provide support for innovative firms to enter the market in order to further promote the growth of MyData services as a key driver of growth in the financial industry. For consumer protection purposes, however, the authorities will strengthen pre-licensing control measures as well as post-licensing management. In order to provide more in-depth screening and consultation, the authorities will accept applications en bloc periodically at the end of every quarter and have them screened by external experts. Background MyData business came under the purview of the law with the revision to the Credit Information Use and Protection Act in February 2020 which aimed to strengthen personal data privacy and securityand ensure the stable provision of services.From an early stage, the authorities minimized the entry barrierto promote access of innovative firms while adopting a licensing system to help establish a sound MyData business ecosystem. Since the first batch of MyData service providers that were granted full license for operation on January 27, 2021, a total of 56 MyData service providers have been given full licenses with 45 MyData services being launched so far. However, there still exists demand for additional licensing by small-scale fintechs and financial companies. Therefore, after operating a taskforce composed of relevant experts,the authorities held discussions on MyData licensing plan for future as well as issues to consider for further screening and licensing. Screening and Licensing Plan for MyData Service Providers in 2022 The licensing requirements for new entrants will be maintained at the current level to promote a continuing provision of innovative services by new entrants that are equipped with creative ideas. Nonetheless, improvements will be made in the following areas for the purpose of consumer protection giv
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Mar 03, 2022
- FSC Holds Meeting on Promoting Further Growth of Financial MyData Services
- FSC Chairman Koh Seungbeom held a meeting with financial MyData service providers, market experts and other relevant institutions on March 3 to discuss ways to promote further growth of the financial MyData industry. During the meeting, participants discussed diverse issues ranging from creating a fairer market place for service providers to ensuring consumers right to choose to strengthening measures for financial data security to making changes to the current regulatory framework. The following is a summary of Chairman Kohs keynote address. Chairmans remarks Since the first launch of the API-based MyData services in the financial sector about two months ago,public use of financial MyData services has become widespread with more than 12.5 billion cases of data transfer performed by 39 service providers (as of Feb. 21, 2022) and some 18.4 million individuals signing up for financial MyData services in aggregate terms. (Significance) In a society characterized as hyperconnectivity, hyperconvergence and hyperindividualism where barriers are crumbling down between diverse sectors and industries and different technologies and industries are being linked together, data is often considered as an essential facility. In a data-driven economy, financial MyData service was introduced for the first time in the world with an aim of guaranteeing data privacy rights of financial consumers and of enabling an integrated search of personal financial data scattered across all financial sectors. The API-based financial MyData services brought about many benefits. First, MyData services allow data subjects to use their own data according to their individual needs and make the use of private banking services easily accessible to ordinary consumers. Second, MyData services enable users to find and manage their financial data more quickly and safely. Third, MyData services provide a more level playing field for anyone with innovative business ideas. Competition and innovation in the finan
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Jan 12, 2022
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Jan 10, 2022
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Jan 06, 2022
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Jan 04, 2022
- API-based Financial MyData Service Fully Launched from January 5
- The FSC announced that the API-based financial MyData service will be fully launched from 16:00 (KST) January 5, after a month-long pilot period leading to improvements in the system. As of January 5, 2022, 33 MyData service providers including banks, financial investment businesses, card companies, savings banks, and fintechs will offer MyData services using standardized APIs.Additional 21 entities are expected to make their MyData services available in the first half of this year after getting their system ready. During the pilot period,the authorities along with the financial industry, fintechs and other relevant institutions have worked to bring about improvements in the system stability, data compatibility and consumer convenience. From a consumer standpoint, the API-based MyData service provides an enhanced level of data privacy and information security by placing a ban on scraping and requiring tech assessment tests and an annual inspection on system vulnerability. Financial consumers can also enjoy a greater level of convenience as more types of financial data can be accessed more quickly and easily at a single place. The API-only MyData scheme will allow MyData service providers to receive consumer data from the relevant data providing institutions more quickly and stably. The API-based MyData system will also provide an impetus for further innovation in business models as MyData service providers become connected to more types of data providers than before. From an industry-wide perspective, the API-based MyData system will help resolve the problem of data monopoly by broadening data access to fintechs and promoting competition. It will also help create quality jobs in the field of data science. The authorities will set up a special response team to ensure stable operation and provision of MyData services by conducting real-time monitoring and taking appropriate measures to guarantee consumer data privacy and security. The special response team will be exp
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Jan 03, 2022
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Dec 21, 2021
- Open Banking Net Users Reach 30 Million at Two-year Anniversary
- The FSC announced that the number of open banking net users reached 30 million with the number of accounts registered surpassing 100 million as the open banking system fully went into service two years ago in December 2019. In two years, the cumulative volume of transactions via open banking reached more than 8.38 billion with the daily average volume of about 20 million transactions occurring for the total amount of some KRW1 trillion every day. Statistical data so far have shown that the open banking users most frequently used the balance inquiry (68%) service, followed by the wire transfer (21%) and transaction inquiry (6%) services. At the onset, open banking was only available from banks and fintech firms but now the service availability has been expanded to a total of 120 financial institutions and fintechs including financial investment firms, card companies and small and medium-sized fintechs. The two years of operating open banking services contributed to the opening up of the financial market infrastructure that has been known for its exclusiveness traditionally. In the mean time, the authorities have worked to improve the system to boost its expandability, fairness and stability. With open banking, financial consumers have been able to enjoy various types of financial services much more conveniently while financial companies and fintech firms have been able to develop and launch more innovative services through platforms, etc. Building upon these outcomes, the authorities will work in the future to introduce an open finance system beyond open banking through which financial consumers can enjoy more comprehensive and personalized financial platform services tailored to their individual needs. In order to ensure strong security measures, the authorities will introduce a zero trust security requirement to strengthen the system-wide security management, guarantee data resiliency and prepare a quick response system for security-related issues. * Please refer t
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Dec 15, 2021
- FSC Chairman Discusses Importance of Innovation and Advancement of Financial Services Platforms
- FSC Chairman Koh Seungbeom met with officials from platform service providers, financial companies and other relevant institutions on December 15 and held talks on ways to promote digital innovation through an advancement of financial services platform. In his keynote address, Chairman Koh said that the government will draw up strategies to promote digital innovation in the five key areas, such as big data, new technology, platform service, digital security and digital asset. The following is a summary of Chairman Kohs keynote address. Chairmans Remarks (Personalized Financial Services Platform) Recent trends in the financial industry have shown a growing tendency toward the provision of more platform-based financial services. Different types of financial services ranging from payment to advisory to asset management services are linked together in a platform to provide more comprehensive and personalized services in digital environments. The entrance of e-commerce businesses into the financial industry and the merging of traditional financial services with non-financial services through a single app are also significant trends. Against this backdrop, there exist concerns about platform service regulation, consumer protection and data monopoly. Platform-based financial services should also be provided with stability in the financial system, consumer protection and fair competition in mind. Based on these principles, the government will seek measures to promote digital transformation in the financial industry in the following areasbig data, new technology, platform service, digital security and digital asset. (Overview of Digital Innovation Strategies) First, the government will help build the infrastructure necessary for promoting innovation through big data. While working on a seamless operation and gradual expansion of MyData services, the authorities will seek ways to improve SMEs and small merchants access to financial services using big data analytics. Second, t
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Dec 09, 2021
- FSC Chairman Holds Talks with Fintech Industry and Pledges Support for Financial Innovation
- FSC Chairman Koh Seungbeom met with officials from the fintech industry and held talks on ways to further promote the growth of fintechs and financial innovation. Chairman Koh talked about the need for regulatory improvements aimed at facilitating financial companies investment in fintechs, providing incentives to enable more collaboration between financial companies and fintechs and providing more opportunities to launch financial services (including MyData service) via online and contactless channels. Chairmans Remarks (Fintech Innovation Overview) In the midst of the fourth industrial revolution driven by big data, artificial intelligence and platform-based services, fintech innovation has led major changes in the financial sector and how financial services are being delivered. First, there is the recent re-bundling phenomenon observed in the fintech industry. The unbundling of various financial services into different units was a major trend in the early era of fintech development. However, more recently, re-bundling of various services using a single platform is being observed. Second, there is more cooperation and collaboration between traditional financial institutions and fintechs. Financial institutions seeking digital innovation and fintechs in need of strategic partnership have created increased synergies between them. Third, the growth of fintechs led to the growth of platform-based financial services, which may have contributed to the increased level of consumer convenience but also raise concerns about consumer safeguards and monopolistic behaviors. (Fintech Innovation Strategy) Against this backdrop, the authorities plan to work on the following areas to support financial innovation. First, the authorities will help build regulatory foundations to facilitate innovation rooted in a safe and stable financial environment. To this end, the authorities will seek regulatory improvements to further promote digital innovation while ensuring consumer safeguard
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Nov 30, 2021
- API-based Financial MyData Service to be Piloted from December
- The FSC announced that financial MyData service will be pilot launched from 16:00 (Korean Standard Time) on December 1, 2021 as the 17 service providers including banks, financial investment businesses, card companies, a mutual finance company and fintechsthat have successfully completed a closed beta testing will begin to offer MyData services prior to the full launch on January 1, 2022. The financial authorities have been working closely with the financial sector and fintechs to improve the way consumers manage and access their personal financial data in a more convenient and safe way while guaranteeing the right to data privacy through MyData services. The efforts made by the authorities have thus far led to (a) an expanded scope of the types of data made available for MyData services, (b) a simplified personal authentication identity verification process, (c) the provision of stronger consumer safeguards and (d) the creation of an environment to promote fair competition between service providers. From December 1, 2021, the API-based financial MyData service will be piloted from 17 financial institutions and fintechs at first with some 20 other service providers including big techs and fintechs joining by the end of this year and 16 other MyData service providers including insurance companies and a credit bureau expected to join in the first half of 2022. The ten other prospective service providers that have gained a preliminary approval are expected to join in the second half of 2022 after their final licensing procedure. The financial authorities along with the MyData service providers and relevant institutions will closely monitor issues that need to be improved upon during the pilot period and ensure a seamless preparation for the full launch on January 1, 2022. Any update on the list of service providers and further information can be found at www.mydatacenter.or.kr. * Please refer to the attached PDF for details.
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Nov 29, 2021
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Nov 25, 2021
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Nov 22, 2021
- Additional Types of Public Financial Data Made Available through Open APIs
- The FSC announced an expansion in the availability of public financial data offered through open APIs at www.data.go.kr. From November 22, public financial data managed by the Korea Exchange, Korea Financial Investment Association, Korea Life Insurance Association, General Insurance Association of Korea and Korea Inclusive Finance Agency will be opened up for use at www.data.go.kr through 18 standardized APIs with 40 functions. Since launching the public financial data platform in April 2019, which began to offer data managed by nine state-backed financial institutions and relevant agencies, the FSC has worked on making more types of public financial data available for a wider use. From June 9, 2020, public financial data from businesses and financial companies became available through open APIsand in September 2020, the authorities along with relevant institutions agreed to promote further opening of public financial data and facilitate its use in the private sector. As a follow-up measure to the last years agreement, the authorities will further open up public financial data managed by the five aforementioned institutions to promote big data analytics through data convergence, etc. The newly added data types include information about stocks and bonds, funds, insurance products, microloan products, etc. The authorities expect that opening up financial data stored and managed by public financial institutions and relevant agencies will help promote innovation and contribute to job creation in the private sector. The authorities will continue to work to meet data demands and seek improvements in the provision of public financial data. * Please refer to the attached PDF for details.
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Nov 17, 2021
- FSC Chairman Pledges Policy Support in Meeting with Specialized Credit Finance Sector
- FSC Chairman Koh Seungbeom held a meeting with the heads of credit card companies and other credit finance companies on November 17 and discussed ways to further promote the development of the specialized credit finance sector. Chairmans Remarks The financial industry is undergoing a major change with digital transformation taking place and the convergence of industries between the financial and non-financial sectors. Specialized credit finance businesses are also facing major challenges and thus need to seek alternative ways to strengthen their competitiveness. In this regard, the government will provide support to help promote further growth of the sector. First, the authorities will work to support credit card companies to grow as integrated payment service providers. The authorities will allow credit card companies to provide MyPayment services and expand the types of ancillary service areas they can assume beyond the currently allowed MyData service, small business CB and big data analytics with the aim of promoting the use of big data for new and innovative business areas. Second, the authorities will provide support to help specialized credit finance companies develop financial service platforms that can offer services tailored to the daily needs of financial consumers. The authorities will continue to promote the development of financial services tailored to the needs of individual consumers using MyPayment and MyData services, while considering the possibility of expanding the sectors platform business services into e-commerce areas, etc. Third, the authorities will work to improve regulations to help facilitate investments in new technology startups, promote contactless (and paperless) sales environment for credit card companies, etc. Innovative ways to deliver financial services to consumers in the specialized credit finance sector can have a significant and immediate impact on the consumers daily needs. As such, the government will continue to listen to
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Sep 13, 2021
- FSC Plans to Make Fractional Trading of Domestic and Foreign Stocks More Widely Available
- The FSC announced its plans to make fractional trading of both domestic and foreign stocks more widely available to help improve access and convenience for investors. Background In 2019, the FSC allowed fractional trading of foreign stocks offered by Shinhan Investment and Korea Investment Securities by designating them as innovative financial services to be granted regulatory exemptions under its financial regulatory sandbox program. As a result, by the end of June 2021, the number of fractional stock traders at Shinhan Investment and Korea Investment Securities reached about 140,000 and 510,000, respectively, with their investment amounts standing at KRW270 million and KRW750 million each. However, fractional trading of domestic stocks remained unavailable due to the principle of indivisibility of shares as well as the non-fractional share-based design with which the domestic securities trading and depository infrastructures was set up. To help improve investor access and convenience, the FSC plans to make improvements to the current fractional trading system and make fractional trading of both domestic and foreign stocks available. Key Details Unlike the current system where individual securities firms have to apply for regulatory exemptions to provide fractional trading services, the new system will be based on a special infrastructure set up at Korea Securities Depository (KSD) that is dedicated to fractional trading and can be accessed and used by any securities firms that wish to offer fractional trading services to their customers. This will strengthen the safety and convenience of fractional trading in both domestic and foreign stocks. (Foreign Stocks) Stock trading in fractional shares of foreign stocks will be directly recorded in the securities firms account books. KSD will maintain separate account books on fraction trades and regularly check their consistency with those of securities firms. Investors will be able to trade in fractional shares of foreig
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Sep 09, 2021
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Sep 08, 2021
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Sep 08, 2021
