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Jun 04, 2020
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Jun 04, 2020
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Jun 03, 2020
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Jun 02, 2020
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May 28, 2020
- FSC Designates 4 More Financial Solutions as 'Innovative Financial Services'
- The FSC added four more financial solutions to the financial regulatory sandbox on May 27, bringing the total number of ‘innovative financial services’ to 106 since launching the financial regulatory sandbox program on April 1, 2019.CHAIRMAN’S REMARKSChairman Eun Sung-soo stated that the regulatory sandbox has made positive changes in the financial sectors since its inception. It has (a) brought more rapid, convenient and affordable financial services for consumers, (b) introduced new and innovative ways of raising capital for small merchants, and (c) accelerated digital transformation for the entire financial industry. In order to prepare for a post-COVID-19 era, the government is pursuing a ‘digital new deal,’ and the sandbox program is essential as it provides a testing ground for digital transformation.In order to more effectively operate the sandbox program, the FSC will (a) focus on testing new digital technologies, such as big data and AI, (b) seek changes in regulations for untact digital services as soon as their safety and security performances are verified, (c) work to extend the regulatory exemption period for fintechs and start-ups, (d) enhance the autonomy of the designated innovative financial services, and (e) provide support to fintech firms with their scale-up and overseas expansion opportunities.OVERVIEW OF NEWLY ADDED ‘INNOVATIVE FINANCIAL SERVICES’1. An untact personal authentication service based on blockchain technologies allowing customers to issue and save their digital certificates for real-name verification purpose (SK Telecom, expected launch in June 2021)2. An untact personal authentication platform that provides customers’ real name verification information for all savings banks using a joint savings bank mobile app (Korea Federation of Savings Banks, expected launch in December 2020)3. An untact personal authentication service using facial recognition technologies (DGB Daegu Bank, expected launch in May 2021)4. A mobile
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May 28, 2020
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May 28, 2020
- FSC Chairman Speaks on Fintech Innovation as Part of Post-COVID-19 Strategy
- FSC Chairman Eun Sung-soo delivered welcoming remarks during the opening session of the 2020 Korea Fintech Week held virtually from May 28.SUMMARY OF CHAIRMAN’S SPEECHThe 2020 Korea Fintech Week will provide opportunities for experiencing connectivity, convergence, openness and innovation in the financial sector based on digital finance and big data. In order to prepare for a post-COVID-19 era, it is important to continue to promote innovation in fintech and digital finance. As part of the government’s strategies to pursue innovation, the FSC will continue to promote digital, big data and untact services in the financial industry.I. INCREASE FUNDING TO PROMOTE DIGITAL ECONOMYThe government is pursuing a ‘digital new deal’ through which establishing more digital infrastructures will help create new jobs. To this end, the government will increase investment in key technologies, such as 5G, AI and big data, and provide support for new growth engines, such as system chips, biohealth and future cars.II. IMPROVE REGULATIONS TO PROMOTE INNOVATIONThe revisions to the data related laws will help facilitate the utilization, convergence and distribution of personal financial data, which will also pave the way for MyData businesses. The abundant availability of public data to businesses will also help create more businesses and jobs. The FSC will seek to revamp the digital payment system through the introduction of MyPayment, while improving the applicability and security of open banking services. The FSC will also continue to work on improving financial regulations through its regulatory sandbox program.III. ENSURE SECURITY SAFETY OF DIGITAL DATAThe FSC will work to maintain a reliable cybersecurity system to facilitate digital innovation by seeking a right balance between data usage and protection, closing the gap on digital divide and preventing cyber voice phishing and other fraudulent activities.* Please refer to the attached PDF for details.
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May 28, 2020
- Vice Chairman Holds Talks on Promoting Market-Based Corporate Restructuring
- FSC Vice Chairman Sohn Byungdoo held talks on promoting more market-based approaches to corporate restructuring with relevant institutions and market experts on May 28.The following is a summary of Vice Chairman Sohn’s remarks.MARKET-BASED APPROACHES TO CORPORATE RESTRUCTURINGAmid the current pandemic-induced economic downturn, many businesses are facing difficulties. With a blurring boundary between liquidity risk and solvency risk, it appears that more and more companies will have to go through corporate restructuring. Meanwhile, the creditor banks face limited capability to support corporate restructuring due to uncertainties about future repayment prospects and burdens of securing additional reserves. Therefore, promoting market-based approaches to corporate restructuring is essential for eliminating this discrepancy.Due to the pandemic-related market uncertainties, companies are selling subsidiaries to bolster liquidity, and the role of experienced market players such as asset managers in the corporate restructuring and MA market is crucial in this regard.CORPORATE RESTRUCTURING FUNDAs of the end of April 2020, the corporate restructuring fund has invested about KRW700 billion in 16 companies since its launch in November 2018. The fund has provided support for business turnaround of twelve companies in the traditional manufacturing sectors, such as steel, shipbuilding and auto parts. The successful turnaround cases of KG Dongbu Steel and Sungdong Shipbuilding provide an important turning point for more market-based solutions to corporate restructuring.As such, the government plans to expand the size of the corporate restructuring fund from KRW1.6 trillion to KRW2.6 trillion this year. With about KRW75 billion from fiscal resources, policy banks have helped to create a KRW500 billion master fund.(PROJECT FUND) With the increased size of the fund, the proportion of project fund will be expanded from 26 percent to 40 percent while making investment available for
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May 27, 2020
- 2020 Online Korea Fintech Week
- The 2nd Korea Fintech Week will be held virtually starting at 10 am on May 28. It is organized into five sessions, and the virtual exhibitions are open to everyone for viewing at free of charge via www.fintechweek.or.kr/2020. SCHEDULE(OPENING SESSION) Welcoming remarks by FSC Chairman Eun Sung-soo and congratulatory remarks by key dignitaries including Lord Mayor of the City of London William Russell and Standard Chartered CEO Bill Winters(SPECIAL SESSIONS) Presentations and seminars on ‘open innovation,’ showcasing major policy and industry trends at home and abroad► FSC: Fintech in Korea and digital transformation strategy in financial sectors► KFTC: Open banking in Korea► FSI: Financial data security in the 4th industrial revolution► VISA-Fintech Center Korea: Sharing successful collaboration lessons between global financial company and fintech► MAS: Future of fintech in post-COVID-19 era► Stone Chalk: Fintech trends in Australia► World Bank: Digital finance for crisis response and economic development – Role of the WB► KPMG: Korean fintech industry in 2020 policy trends► KOSCOM: Financial cloud computing and compliance in financial services► FSI: Security evaluation trends of cloud service providers in financial sectors► Regtech suptech showcases(VIRTUAL EXHIBITION HALLS) The six virtual exhibition halls are organized into a fintech ecosystem hall, a financial enterprise hall, a fintech start-up hall, a fintech scale-up hall, a big tech hall and a global enterprise hall, participated by about 150 entitiesTo help attract investment for the K-Growth fund, a major source of fintech investment operated by the Korea Growth Investment Corporation, a shortcut to fintech investors’ relations will be placed on top of the main page.(ONLINE JOB FAIR) HR managers from 35 financial companies and fintech firms will provide information about job openings, nature of work and qualities they look for in new hires. About a dozen companies have plans t
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May 26, 2020
- Vice Chairman Calls for Close Cooperation between Businesses, Creditors and Lending Institutions
- FSC Vice Chairman Sohn Byungdoo held the 5th financial risk assessment meeting on May 26 to check the current status of the COVID-19 financial support for businesses and households. The following is a summary of Vice Chairman’s remarks.(LOW-RATE FINANCIAL SUPPORT FOR SMALL MERCHANTS) The government has made available KRW16.4 trillion in low interest rate financial support package for about 430,000 small merchants. Between May 18 and 22, about 31,442 applications were received by lending institutions.(EMERGENCY RELIEF PAYMENTS) As of May 25, about 94 percent of households applied for emergency relief payments. Swift processing of relief payments was made possible by strong cooperation between the public and private sectors.(SPV KEY INDUSTRY STABILIZATION FUND) The government will take prompt steps in preparation for establishing a special purpose vehicle intended to purchase low rated corporate bonds and CP, and for launching a key industry stabilization fund this week.In order to boost the effectiveness of these policies, close cooperation is essential between businesses, creditors and financial institutions.FINANCIAL SUPPORT PROVIDEDAs of May 22, a total of KRW107.8 trillion (1,327,000 individual cases) in loans and guarantees as well as loan and guarantee extensions were provided to the SMEs and small-scale businesses that have been hit by the COVID-19 pandemic.► FINANCING BY TYPE: KRW54.3 trillion (1,038,000 cases) in new loans and guarantees, KRW50.2 trillion (256,000 cases) in maturity extensions and deferred payments, KRW900 billion (7,000 cases) in deferment of interest payments, and KRW2.4 trillion (25,000 cases) in export-import credit finance and discounted interest rates and late fees► FINANCING BY INDUSTRY: KRW13.5 trillion (150,000 cases) to wholesale businesses, KRW8.7 trillion (273,000 cases) to restaurant businesses and KRW8.7 trillion (223,000 cases) to retail businesses► FINANCING BY PROVIDER: KRW59.1 trillion (824,000 cases) by policy bank
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May 25, 2020
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May 20, 2020
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May 20, 2020
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May 19, 2020
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May 19, 2020
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May 19, 2020
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May 18, 2020
- Vice Chairman Holds Meeting on Measures to Improve Asset-backed Securities Market
- FSC Vice Chairman Sohn Byungdoo held a meeting with industry officials and experts on May 18 to discuss ways to improve the asset-backed securities market.The following is a summary of Vice Chairman Sohn’s remarks.(IMPORTANT ROLE OF ASSET-BACKED SECURITIES) The asset-backed security (ABS) provides businesses with a great means to raise funds and offers more favorable terms than credit-based financing. Businesses are able to treat securitized assets off-the-book for accounting purposes, which helps to improve their financial structure. The ABS allows businesses to securitize diverse assets including future assets and intellectual property rights to generate funds needed for now. In Korea, the enactment of the Asset-backed Securitization Act in 1998 contributed to clearing troubled assets and helped ride out the foreign exchange crisis. Since then, the ABS has been used as an innovative means to raise funds by enterprises and financial companies.(IDENTIFYING PROBLEMS) (a) With regard to risk management, the rapid expansion of the unregistered securities market can be a risk factor as it is difficult to identify the issuing entity, records of underlying assets and securitization structure. In particular, the real estate project financing asset-backed commercial paper (ABCP) poses problems for securities firms as they have to take the burden of refinancing risk due to a duration mismatch between fund raising and fund management. (b) The role of ABS in corporate financing has also been in decline. Over the years, the ABS market’s focus has been shifting toward transactions that follow interest margins. Due to the delayed reforms in the registered securities system, the current ABS market has been unable to fully accommodate diverse securitization demand in the market.(MEASURES FOR IMPROVEMENT) (a) To enhance risk management, the government will introduce the risk retention rule, requiring asset holders to possess about 5 percent of credit risk to prevent conflict of
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May 18, 2020
- Measures to Improve ETF and ETN Markets
- The FSC announced the measures to improve the exchange-traded fund (ETF) and exchange-traded note (ETN) markets on May 15, which seek to contain overheated investment demand and mitigate excessive concentration on particular investment products.The measures are aimed at (a) preventing indiscriminate investment behavior in ETF and ETN markets by requiring minimum deposits and mandatory online education for retail investors, (b) improving brokerage firms’ management of disparate ratios to minimize investor damages from speculative demand, and (c) creating an environment for the development of diverse investment products to break up excess demand on particular instruments.BACKGROUNDETFs and ETNs are exchange listed investment products structured to enable diversification of investment for retail investors in traditional investment assets, such as stocks and bonds, and to allow small-sum investing in a variety of alternative assets including foreign exchanges and commodities.The ETF market has grown as a major publicly offered fund market and ETNs have provided a niche market where ETF offering remained difficult. Recently, there has been excessive concentration toward leveraged ETFs and ETNs amid the COVID-19 pandemic-induced market volatility. After the collapse of international oil prices, investors flocked to major oil ETFs and ETNs with an expectation for a rebound in oil prices, thereby raising the potential for losses. Trend followers who lack information about the risk characteristics of these products also flocked to invest in oil ETFs and ETNs, artificially pushing up trading prices well above their intrinsic asset values. A series of investor alerts and cautions by securities companies, the Korea Exchange and the FSS as well as transaction suspensions have been issued, but they have yet to successfully curb the overheated demand. Thus, the financial authorities drew up measures to cool overheated investor demand and more effectively manage markets.RECENT IS
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May 18, 2020
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May 14, 2020
- Overview of Financial Regulatory Sandbox
- The FSC has been operating a financial regulatory sandbox program since April 1, 2019 to promote competition and innovation in the financial industry and provide more benefits to consumers.OVERVIEWA total of 102 ‘innovative financial services’ have been designated so far through fourteen evaluation committee meetings. Under the regulatory sandbox program, the designated firms are granted exemptions from licensing and other sales regulations for up to four years. The evaluation is based on the level of innovativeness, potential contribution to consumer convenience, and the soundness and feasibility of business plan.Among the 102 designated service providers, fintech firms (54 cases, 53%) made up a majority, followed by financial institutions (39 cases, 38%), IT firms (6 cases, 6%) and public sector institutions (3 cases, 3%).By service types, banks were most numerous (16 cases), followed by insurance services (15 cases), capital markets-related services (15 cases), loan comparison services (14 cases), payment cards (13 cases), data services (12 cases), electronic finance (11 cases), foreign exchange (3 cases) and others (3 cases).As of now, 36 ‘innovative financial services’ are at the stage of market test with 66 more expected to be launched in the first half this year.FINANCIAL INNOVATIONINCREASING BENEFITS TO CONSUMERS: a) The shift away from a supplier-driven market toward a more consumer-oriented environment has lowered costs for financial services in the form of interest payments, insurance premiums, etc., b) With the launching of easy-to-use financial services in everyday life, consumer access to financial services has been improved, c) Development of specific services tailored to the needs of SMEs and small-scale businesses has helped extend more financing opportunities to those that had been traditionally unable to access financial services, d) Innovative financial services have contributed to addressing various social problems in the areas of renewa
