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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May 26, 2021
- FSC Plans to Improve Rules to Promote Big Data Analytics in Financial Sectors
- The FSC announced its plan for improving rules on data convergence of anonymized and pseudonymized data in financial sectors on May 26 with an aim to further promote big data analytics in financial sectors. With the revised Credit Information Use and Protection Act taking effect on August 5, 2020, data convergence through big data analytics became possible through one of the four government-designated data specializing institutions. As of May 25, 2021, 41 cases of data convergence have been completed on 111 pieces of data by data specializing institutions. A total of 46 financial and non-financial companies have participated by providing their data and 35 companies have received the converged data for analysis and use. The converged data are being used for developing more convenient financial services for diverse types of consumers, introducing new technologies and services and more closely analyzing policy outcomes and improving policies. Against this backdrop, the FSC plans to work on the following measures to further advance big data analytics in financial sectors. Key Measures First, the FSC plans to increase the number of designated institutions that specialize in data convergence in the second half of this year to make it possible the provision of more specialized data convergence services and open up more types of data from businesses and public institutions. Second, the FSC plans to ease some of the restrictions placed on data convergence between a data specializing institution and a third party entity. Currently, data convergence between data stored at a data specializing institution and that provided by a third party is only permitted when the converged data is for use by a third party under the condition that there is no potential conflict of interests in using the converged data. The FSC plans to ease this restriction to allow data convergence and use by the same entity in a way that still prevents conflicts of interests. Third, the Credit Information Us
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May 26, 2021
- 2021 Korea Fintech Week
- The 3rd Korea Fintech Week will be held virtually as well as off-line from May 26 to 28. The three-day event will feature off-line sessions including an opening ceremony, IR meetings and idea contests, and online exhibitions. The off-line events will be live streaming via www.fintechweek.or.kr/2021. (Offline Sessions) Off-line sessions will start with an opening ceremony at 10 am on May 26, providing opportunities for fintech businesses to share fintech trends at home and abroad, showcase innovative fintech services and attract investments. In his welcoming remarks, FSC Chairman Eun Sung-soo introduces Koreas progress in fintech policy and future plans. Regulatory reforms enabled new data business such as MyData and the rollout of 82 innovative financial services for two years via the financial regulatory sandbox. The government will continue its efforts to boost fintech growth and digital innovation in finance by allowing fitech startups to operate D-testbed and easing regulations on financial institutions to facilitate their investment in fintech businesses. Chairman Eun emphasizes that financial stability is as important as innovation and pledged to enable more people to share the outcomes of financial innovation more safely. The opening ceremony also features congratulatory remarks by Yoon Kwan-seok, Chairman of the National Policy Committee and Zhou Liang, Vice Chairman of China Banking and Insurance Regulatory Commission; and keynote speeches by Michael Danagher, Canadian Ambassador to Korea and James Kim, Chairman CEO of AMCHAM Korea. (Online Sessions) Online events and exhibitions will be available from 10 am on May 26 at www.fintechweek.or.kr/2021. The online expo offers virtual booths, virtual one-on-one meetings between fintechs and investors, and online job fair, etc. (Special Session on Green Finance) This years Fintech Week features a special session on green finance both online and offline to promote the 2021 P4G Seoul Summit scheduled for May 30-31.
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May 17, 2021
- FSC Announces Plan to Promote the Use of Digital and Contactless Insurance Sales Mechanisms
- The FSC announced a plan to improve rules on insurance business in order to promote the use of digital, AI-based and contactless insurance sales mechanisms as part of the broader aim to boost consumer confidence and promote innovation in the insurance industry. Insurance sales channels face structure changes amid an expansion of contactless services and digital technologies, increasing number of platform businesses entering the market and the growth of general agencies (GAs). To improve the effectiveness of consumer protection while removing some of the inefficiencies observed in the current insurance sales practices, the authorities have prepared the following plan for changing the rules on insurance sales mechanisms. Key Details A. Face-to-Face Sales - Previously, insurance agents and brokers were required to meet customers face-to-face at least once to explain coverage details. However, with the telemarketing safeguard measures in place, such as the requirements for recording and confirmation by insurers, sellers are allowed to provide explanations via telephone calls. (rule change completed on Mar 25, 2021) - When subscribing for an insurance coverage using a mobile phone, customers faced the inconvenience of having to put their signature multiple times throughout the process. This electronic signature requirement will be reduced down to only once at the beginning of the subscription process to improve convenience. (further improvements expected within May 2021) B. Telemarketing - With the use of the text-to-speech AI-based technology, insurance agents and brokers will no longer have to read the entire sales script that usually took about thirty minutes to finish. With the AI-based voicebot, the salesperson is able to instead focus on answering questions from the customer and providing supplemental information. (implementation expected in Q3 2021) - Previously, telemarketing and mobile sales mechanisms remained two distinct sales channels. However, a hybrid sale
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May 12, 2021
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Apr 29, 2021
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Apr 28, 2021
- Open Banking Services Available from Savings Banks
- The FSC announced the availability of open banking services from savings banks from April 29, 2021. From next month, credit card companies are also expected to join open banking services. Since its first launch in December 2019, open banking in Korea has become widespread with the cumulative number of subscription reaching about 76.6 million with more than 138.5 million accounts registered as of April 25, 2021. In order to promote further development of open banking, the FSCannouncedmeasures to expand participating institutions at the 3rd digital finance meeting held on October 21, 2020.As a result, about one hundred banks, fintechs, mutual finance companies and securities firms have joined and are providing open banking services as of April 25, 2021. From April 29, seventy-three savings banks will also begin to provide open banking services through their mobile apps or websites with six other savings banks expected to join as soon as they finish developing IT systems. With open banking becoming available from savings banks, open banking is now provided by all deposit-taking financial institutions. As such, it is expected to further enhance user experience and consumer convenience. In this regard, growing competition between financial institutions is also expected to contribute to their overall digital competitiveness. The FSC will continue to promote innovation in the financial industry and work to expand open banking to credit card companies from the end of May this year. * Please refer to the attached PDF for details.
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Apr 20, 2021
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Apr 14, 2021
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Apr 13, 2021
- 7th Digital Finance Meeting Discusses Guidelines on the Use of AI Technologies in Financial Services
- Vice Chairman Doh Kyu-sang held the 7th consultative body meeting on digital finance via teleconference on April 13 and discussed potential risks of digital transformation in financial sectors, establishing guidelines on the use of AI technologies in financial services and plan for the operation of the consultative body subcommittees. At the meeting, Vice Chairman Doh spoke about the progress made by the consultative body meetings as they helped to resolve differences of interests between big techs, fintechs and financial companies. Amid a deepening digital convergence taking place throughout the economy, Vice Chairman Doh stressed the importance of continuing with efforts to seek innovative solutions in financial sectors. The following is a summary of Vice Chairman Dohs remarks. (Digital Transformation and Potential Risks in Financial Sectors) Digital transformation is an inevitable change throughout the world. Although there are positive effects, such as expanded consumer choice and increased efficiency, there also needs to be policy efforts to prepare for potential risks. As such, the FSC will first strengthen risk management on the impact of a growing number of new players entering the financial markets. As competition between big techs and financial institutions deepens, the authorities will keep a close eye on for any changes in their sales behavior, potential damages to consumers and the possibility of debilitating soundness of financial companies. Second, the FSC will lay the groundwork upon which new technologies can be used safely. The authorities will work to ensure transparency and fairness in the process of using AI and other innovative technologies in financial services, while closely inspecting for the possibility of skewness which may result from financial companies using similar algorithms. Third, the authorities will closely monitor financial sector risks, such as the possibility of risk transfer in the process of non-financial firms engaging in fi
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Apr 13, 2021
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Apr 08, 2021
- Meaningful Improvements in Financial Services Made Possible by Financial Regulatory Sandbox
- The FSC announced key achievements and progress in the operation of the financial regulatory sandbox program on April 8. Background The financial regulatory sandbox program was launched on April 1, 2019 to promote competition and innovation in the financial industry while improving convenience for consumers. The sandbox program allows businesses designated as innovative financial service providers to enjoy regulatory exemptions for up to four years, so that they can test their innovative business ideas and technologies. In addition, the revised Special Act on Support for Financial Innovation allows designated firms to request regulatory improvements and the government may decide to grant an additional regulatory exemption period of one year and six months. Since April 1, 2019, the FSC has designated 139 innovative financial services in total with 78 such services currently being tested in the market and a total of 108 innovative financial services expected to be in service within the first half of 2021.For innovative services that have been tested to bring about significant consumer convenience and guaranteed security, the government has worked to improve regulations in a prompt manner. Out of 68 such regulations, improvements have been made to 14 of them with plans to revamp 22 regulatory items currently being prepared. For innovative businesses, comprehensive support and consulting is being provided through the Fintech Center Korea, from the stage of sandbox program application to testing to service launch. Chairmans Remarks (Progress in Financial Regulatory Sandbox) The financial regulatory sandbox program has become an essential policy to promote innovation in the financial industry and help foster fintechs. Bold attempts at innovation through the sandbox program have led to meaningful changes in our daily lives. First, the public is experiencing significant financial innovation in their daily economic activities. The number of users of innovative financial serv
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Mar 24, 2021
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Mar 11, 2021
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Mar 03, 2021
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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
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Feb 18, 2021
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Feb 15, 2021
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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
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Feb 08, 2021
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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
