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Jul 07, 2020
- FSC Chairman Underscores Balance between Financial Innovation and Data Security
- FSC Chairman Eun Sung-soo attended a seminar held by the Financial Security Institute commemorating the day of information protection on July 7 and delivered a keynote address underscoring the importance of maintaining a balance between financial innovation and data security.The following is a summary of Chairman Eun’s remarks.(DIGITAL FINANCE) The COVID-19 pandemic has accelerated the trend for contact-less financial services and digital transformation amid the 4th industrial revolution. Consumer preference for online transactions, such as mobile-based simple money transfer or payment methods, has increased as well as the frequency of telecommuting and teleconferencing by financial institutions. The government has been actively pursuing policies to promote innovation in the financial sectors. As a result, a total of 106 ‘innovative financial services’ have been designated through the regulatory sandbox program. As open banking became fully operational in December last year, more than seven of ten economically active individuals now use open banking, and the number of account views and transfers reached more than a billion. Moreover, the revisions to the three major data-related laws including the Credit Information Act will go into effect on August 5.(NEW CHALLENGES) Innovation in digital finance poses new challenges. Unlawful activities, such as identity theft or vishing, can lead to financial crimes. With a growing number of big techs and other nonfinancial institutions playing bigger roles in the provision of financial services, the third party risk originating from nonfinancial sectors has increased. The scope of cyber threats has also become wider with the application of newly available digital technologies. In this regard, without a guarantee for the safe protection of personal wealth and identity, innovation in digital finance is nothing more than a house of cards.(BALANCE BETWEEN INNOVATION SECURITY) In order to maintain an appropriate balance between
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Jul 06, 2020
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Jul 06, 2020
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Jul 02, 2020
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Jul 02, 2020
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Jul 02, 2020
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Jul 01, 2020
- FSC Announces Plans to Further Promote Use of Big Data in Finance
- The FSC announced its plans to make financial big data more widely available on July 1, which include making improvements to the Korea Credit Information Services’ CreDB system and newly creating an open big data system at the Korea Financial Telecommunications Clearings Institute.BACKGROUNDData is considered as an essential commodity in digital economy, and opening up large sets of data stored at public institutions to be utilized by companies is crucial. In this regard, the FSC has been building the necessary big data infrastructure to facilitate the opening up, distribution and convergence of data through following stages.(CREDB SYSTEM) Personal and business credit information system called CreDB was established at the Korea Credit Information Services, offering financial data to financial companies, enterprises and academia beginning on June 3, 2019.(FINANCIAL DATA EXCHANGE) Financial data exchange was launched on May 11, 2020, providing a one-stop data search, transaction and distribution service.(OPENING UP PUBLIC FINANCIAL DATA) About 44.5 million pieces of public financial data stored at the FSC and nine other public financial institutions have been opened up to the private sector enterprises on June 9, 2020.(DESIGNATING DATA SPECIALIZING INSTITUTION) To ensure safety and security in the data convergence process, data specializing institutions will be designated in August 2020.IMPROVEMENTS TO CREDBDue to a rise in demand, the CreDB system needs to be improved to (a) make more types of data sets available, (b) improve server capacity to make deep learning and other types of more sophisticated data analysis possible and (c) make cross-convergence and analysis possible between the CreDB data and other types of nonfinancial data.(DATA SETS) Introduce insurance database (from July 1), user tailored database (from H2 2020) and educational database (from July 1) to be newly added to the CreDB(SERVER CAPACITY) Boost the current server capacity in H2 2020 to enable
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Jun 30, 2020
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Jun 30, 2020
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Jun 30, 2020
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Jun 29, 2020
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Jun 29, 2020
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Jun 29, 2020
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Jun 25, 2020
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Jun 24, 2020
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Jun 24, 2020
- FSC Changes Rules on Liquid Asset Requirements for Repo Transactions
- The FSC revised the regulations on financial investment business on June 24, laying out specific liquid asset requirements for the sellers of repurchase agreements.The FSC has been pursuing changes in regulations to improve the effectiveness and soundness of the repurchase agreement (repo) market. The revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act in December last year introduced a legal basis to require repo sellers (borrowers) to hold liquid assets. The changes in regulations adopted today are a follow-up measure, establishing the specific scope of liquid assets as well as holding requirements.SCOPE OF LIQUID ASSETSLiquid assets include cash, savings accounts, certificates of deposit, liquid loan commitments, readily disposable deposits of securities companies, up to 30 percent of money market trust (MMT) and money market wrap (MMW), promissory notes, payment reserves of the Bank of Korea. Liquid assets in foreign currencies also qualify.LIQUID ASSET HOLDING REQUIREMENTSThe requirements for liquid asset holding for repo sellers (borrowers) will gradually increase in three stages as shown in the table below from up to one percent of the transaction amount in July to up to ten percent between August 2020 and April 2021, and then to up to twenty percent thereafter.The above changes in regulations will go into effect on July 1, 2020 along with the improved rules on minimum margin requirements for repo buyers (lenders).* Please refer to the attached PDF for details.
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Jun 24, 2020
- FSC Identifies D-SIBs for 2021
- The FSC identified a total of ten bank holding companies and banks as domestic systemically important banks (D-SIBs) for 2021 as follows: Shinhan Financial Group, Hana Financial Group, KB Financial Group, Woori Financial Group, NH Financial Group, Shinhan Bank, Woori Bank, KEB Hana Bank, KB Kookmin Bank and NH Bank. Compared to the previous year, Jeju Bank from Shinhan Financial Group will be removed from the D-SIB list pursuant to the temporary easing of financial regulations announced on April 17, which excludes smaller sized regional banks from the D-SIB designation and relieves them from the duty of additional capital surcharge.Those identified as D-SIBs will be required to set aside an additional capital surcharge of 1% in 2021.* Please refer to the attached PDF for details.
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Jun 23, 2020
- FSC Chairman Highlights Importance of Building Mutual Trust between Start-ups and Investors
- FSC Chairman Eun Sung-soo attended the global start-up conference NextRise 2020 on June 23 in Seoul, and delivered congratulatory remarks. During his speech, Chairman Eun explained the government’s policy to promote innovation in financial services while encouraging start-up entrepreneurs.The following is a summary of Chairman Eun’s remarks.(START-UP ENVIRONMENT) Despite unexpected difficulties and uncertainties caused by the COVID-19, the changing economic conditions provide challenges as well as new opportunities. We may be able to seize new opportunities if we are well prepared for the post-pandemic world and changing global economic conditions.(INNOVATION IN FINANCIAL SERVICES) The government is pursuing diverse strategies to change our economy from a ‘chaser’ to a ‘leader.’ In finance, the government will focus on promoting innovative financial services to help support companies. Working with other ministries, the FSC will select about 200 innovative firms to provide targeted financial assistance. To support innovative firms at their growth stage, the government will work to expand the scale-up fund from KRW8 trillion to KRW15 trillion by 2022. To promote crowdfunding as an important financing channel for start-ups, the government will allow start-ups as well as SMEs to issue securities to raise funds and expand the annual issuance cap from KRW1.5 billion to KRW3 billion. The government-backed start-up incubating center Mapo Front1 will become operational next month. During the second half of this year, the government will work on improving the business credit evaluation system.(BUILDING MUTUAL TRUST) Aside from government policies, building mutual trust is important between businesses and investors. Innovative ideas and technological prowess should earn trust from investors. Similarly, investors and lending institutions should build trust from the market through transparent management of capital.* Please refer to the attached PDF for details.
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Jun 23, 2020
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Jun 23, 2020
