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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Jan 06, 2021
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Dec 22, 2020
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Dec 22, 2020
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Dec 21, 2020
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Dec 18, 2020
- Tech Financing Guildeline to Facilitate Effective Lending Support For Innovative SMEs
- The FSC announced the introduction of a new tech financing guideline, which outlines details about the specific target business sectors and relevant procedures of tech financing. The guideline will go into effect from January 2021.BACKGROUNDSince it was first introduced in January 2014, tech financing grew significantly as more banks and tech credit bureaus (TCBs) became interested in offering financing options to innovative SMEs based on their technological prowess and future growth potential. Until now, five tech credit bureaus and ten banks have been providing tech credit evaluation service using their own evaluation models. In order to strengthen the accountability and stability of tech financing and improve its qualitative standards, a guideline on tech financing has been established as follows.KEY DETAILS1) Setting up necessary infrastructure for tech financing- Require TCBs to set up a division specializing in tech financing and specify division members’ professional qualifications- Introduce a standardized TCB evaluation model to enhance consistency and stability- Establish an independent organization charged with inspecting the standard TCB evaluation model2) Providing support to SMEs with technological prowess and innovativeness- SMEs with innovative ideas in manufacturing, knowledge and content industries, tech-based environmental or construction sectors, new and renewable energy sectors, as well as those with proven records of technological prowess through patents, etc.3) Establishing clear procedures on tech financing- Provide specific guidelines on tech financing procedures for SMEs, banks, TCBs and Korea Credit Information Services- Make site inspections mandatory in principle with specific cases for exemption- Require tech credit evaluating institutions to set up internal inspection frameworks to ensure the appropriateness and fairness of their tech credit evaluation4) Recommending a set of professional rules and ethics for banks and TCBs- Promote
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Dec 16, 2020
- FSC Plans to Promote Role of Insurers in Healthcare Industry
- The FSC announced its plans to expand the role of insurance businesses in the provision of non-medical healthcare services on December 16. The FSC will work to improve relevant regulations through consultative body meetings on digital finance and by setting up a taskforce to prepare more detailed plans in the first half of 2021.BACKGROUNDHealthcare and insurance share a common denominator in offering security to individuals, although the functional linkage between the two has been severed due to restrictions in regulation and limitations in technology. However, with the advancement of technologies in the areas of Internet-of-Things, big data and platforms, a convergence between healthcare and insurance services is increasingly becoming available. Amid an aging society and higher prevalence of chronic diseases, the newly emerging healthcare industry has received growing attention. As such, the FSC plans to pursue a mid- to long-term strategy of promoting the role of insurers in the provision of non-medical healthcare services, which will contribute to the overall improvement in the healthcare system.KEY MEASURESI. ALLOW INSURERS TO PROVIDE HEALTHCARE SERVICES TO GENERAL PUBLICCurrently, insurance companies are allowed to provide non-medical healthcare services only to their own coverage subscribers, such as personal health data management and fitness assistance platform services, as indicated by the guidelines issued by the Ministry of Health and Welfare. This service provision will be extended to the general public with the expectation of promoting diversity and quality of healthcare services while lowering insurance premiums in the long run.II. IMPROVE RULES ON SUBSIDIARIES FOR INSURANCE BUSINESSESCurrently, insurance companies are permitted to own shares of subsidiaries in the areas prescribed by the Enforcement Decree of the Insurance Business Act. However, due to a lack of specific provisions, there exist legal uncertainties with respect to whether insurers are
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Dec 10, 2020
- 5th Digital Finance Meeting Unveils Plans to Improve Rules and Regulations
- Vice Chairman Doh Kyu-sang held the 5th consultative body meeting on digital finance on December 10 and discussed ways to improve rules and regulations for an ‘upward leveling’ of financial regulations for financial institutions, fintechs and big techs alike, which will promote competition and innovation for all.VICE CHAIRMAN’S REMARKSAmid significant changes taking place in the financial industry, fintechs are growing rapidly, big techs are entering financial markets and traditional financial institutions are actively pursuing digital innovation. In this process, the existing regulatory regime has not been able to sufficiently take into account the changing digital environment. There also have been concerns about the lack of fair competition and the need to apply same regulations for same functions. As such, the competition has become fiercer with growing uncertainties about the future.To promote communication and cooperation between different market players, the consultative body meeting on digital finance was established on September 10. A series of meetings with different market players since then helped to collect diverse opinions and suggestions. With the goal of ‘upward leveling’ of financial regulations for financial institutions, fintechs and big techs alike, the FSC has prepared plans to level the playing field and take into account the needs of different market players.KEY SUGGESTIONSA total of forty out of sixty-two suggestions (65%) have been accepted on the issue of regulatory arbitrage and digital transition, with fifteen others pending for mid- to long-term review.I. REGULATORY ARBITRAGE ISSUE- Expand opportunities for banks to operate platform business- Allow credit card companies to operate one-stop payment service business- Establish rules to oversee big techs’ platform sales activities- Allow financial companies to invest in and own shares of fintechs- Make data provision for MyData more equitable for banks and electronic financial bu
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Nov 25, 2020
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Nov 19, 2020
- FSC Designates 5 More ‘Innovative Financial Services’ for Regulatory Sandbox
- The FSC added five more financial solutions to the financial regulatory sandbox on November 19, bringing the total number of ‘innovative financial services’ to 120 since launching the financial regulatory sandbox program on April 1, 2019.OVERVIEW OF NEWLY ADDED ‘INNOVATIVE FINANCIAL SERVICES’1.A mobile app-based real name verification service for bank customers who visit bank branch without a government-issued identification (Shinhan Bank, expected launch in September 2021)2.A safe driving reward program, which offers a gift certificate of KRW10,000 to navigation app1 users with a car insurance policy2 when their driving records collected via a driving-tag3 meet safe-driving standards (Carrot Insurance SK Telecom, expected launch in December 2020)3.A point-payment service for an insurance claim that allows customers to purchase products or services at a discount with given points on an online platform (Hanwhalife, expected launch in April 2021)4.A credit card membership solution, which allows merchants to join membership through a mobile app (PayHere, expected launch in July 2021)5.A mobile credit card terminal solution, which uses the app on a smartphone as a card reader instead of a terminal machine (ANB Korea, expected launch in May 2021)* Please refer to the attached PDF for details.
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Nov 12, 2020
- 4th Digital Finance Meeting Outlines Three Key Principles for MyData Industry
- Vice Chairman Doh Kyu-sang presided over the 4th consultative body meeting on digital finance on November 12 and laid out the following three key principles for the MyData industry—(a) guaranteeing consumer rights to data ownership, (b) improving safety and scalability of MyData services and (c) creating a cooperative ecosystem for all stakeholders.The following is a summary of Vice Chairman Doh’s remarks.SIGNIFICANCE OF MYDATA INDUSTRYMyData industry has been introduced to strengthen consumer rights to data ownership and cultivate new data industries. With MyData services, individuals will be able to manage within a single platform not only their credit data from different financial institutions, such as banks, credit card companies and insurance companies, but also non-financial information, such as data on telecommunication and public utilities fees. There have been similar attempts in other countries, such as the EU, the UK and Japan, but their services have been restricted to bank account data.MyData industry in Korea is the first in its kind, offering an integrated credit data management platform beyond banking services. Currently, a preliminary license application review is taking place on thirty-five existing MyData business entities, with the application results expected to be announced at the beginning of next year. The market entrance of MyData businesses as new players will bring about a few changes. First, consumers will be able to practice data ownership instead of financial institutions in which consumer data is stored. Consumers’ control over their own data will be enhanced as they can easily check, manage, correct or delete according to their needs. Second, there will be increased competition and innovation in the financial industry. Large financial companies will no longer have a monopoly over consumer data, but instead be encouraged to compete over consumer utility. Lastly, MyData businesses will help create quality jobs in ICT and fintech s
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Nov 10, 2020
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Nov 04, 2020
- FSC Selects Two More Fintechs as Designated Agents to Provide Financial Services
- The FSC selected Finotek and Big Value as designated fintech firms on November 3, allowing them to provide financial services on behalf of Jeju Bank, BNK Kyongnam Bank and Kwangju Bank, and Pepper Savings Bank, respectively.Finotek will make available online refinancing brokerage platform service, which is expected to improve consumer convenience and efficiency while saving costs.Using big data and artificial intelligence technologies based on public data, Big Value will provide estimates on market prices and collateral values of atypical assets. Operating a big-data driven automated price estimation system for small-scale real estate properties, this service is expected to boost price transparency and enable financial businesses to improve their work efficiency.The FSC has selected a total of 33 designated fintech firms so far since May 2018. Application for the next round will be open from November 9, 2020 to January 8, 2021, with the results expected to be announced in March next year.* Please refer to the attached PDF for details.
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Oct 21, 2020
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Oct 21, 2020
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Sep 24, 2020
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Sep 24, 2020
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Sep 10, 2020
- FSC Holds 1st Consultative Body Meeting on Digital Finance
- The FSC launched a public-private joint consultative body on digital finance, composed of leaders and experts representing financial sectors, big techs, fintechs and major financial labor unions, and held a kick-off meeting on digital finance via teleconference on September 10.The joint consultative body has been set up to tackle diverse challenges arising from the era of digital finance and offer balanced perspectives and solutions. The consultative body will operate four thematic working groups on (i) big tech-fintech relations, (ii) rules and regulations, (iii) financial data security and (iv) financial consumer protection.During the meeting, Vice Chairman Sohn Byungdoo spoke about the need to (i) continue regulatory reforms to promote innovation in financial services, (ii) build a fair competition environment for market participants, (iii) ensure consumer safety in digital finance, (iv) review risk factors related to financial market stability and (v) evaluate the impact of digital transformation on the society as a whole.The participants agreed on the need to have ongoing discussions on how to further develop the traditional financial industry and to promote close cooperation and win-win strategy between financial enterprises and digital platform businesses including fintechs.The joint consultative body will hold meetings regularly throughout this year and make its findings available to the public.* Please refer to the attached PDF for details.
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Sep 02, 2020
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Aug 26, 2020
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Aug 20, 2020
