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.
Jul 22, 2021
- FSC Selects Eight More 'Innovative Financial Services' for Financial Regulatory Sandbox
- The FSC decided to designate eight more financial solutions as innovative financial services at its regular meeting held on July 21. This brings the total number of designated services to 153 since the regulatory sandbox program was first launched on April 1, 2019. Overview of Newly Added Innovative Financial Services 1. A real-name identification and verification service using facial recognition technologies which allows consumers to visit bank branches and use financial services without presenting their ID cards (Daegu Bank, expected in Apr. 2022) 2. A real-name identification and verification service using facial recognition technologies for checking customers personal identification in contactless settings, which will allow customers to open up bank accounts even after the banks regular work hours (Busan Bank, expected in Oct. 2021) 3~5. Online-based telemarketing insurance subscription services using mobile devices that reduce the hassle of reading and recording scripts for insurance telemarketers while still guaranteeing supplemental measures for consumer protection (Toss Insurance, DB Insurance and NongHyup Life Insurance, expected in Oct. 2021, Feb. 2022 and Mar. 2022, respectively) 6~7. QR code enabled credit card payment services which require no physical point-of-service (POS) terminal for businesses to process credit card payments which will help improve convenience for consumers while allowing more small-scale businesses to adopt mobile simply payment methods (Seeroo Information and Paycoq, both expected in H1 2022) 8. A non-recourse accounts receivable factoring service which assumes the risk of buyers failure to honor payment obligations in place of the seller, thereby helping firms with new technologies to raise funds and carry out business operations in a more stable manner (Korea Technology Finance Corporation, expected in Jun. 2022) * Please refer to the attached PDF for details.
Jul 13, 2021
- Authorities to Promote Mutual Cooperation between Insurance and Health Care Industries
- The FSC held the 2nd taskforce meeting on promoting the role of insurers in providing health care-related services on July 13. At the meeting, officials discussed the progress of regulatory reforms as well as areas for further improvements, insurance companies access to public health care data managed by the Health Insurance Review Assessment Service (HIRA) and boosting cooperation between the insurance and health care industries. With regulatory reforms undertaken by the authorities thus far, insurance companies are now allowed to provide health care-related services to general customers, establish a health care or MyData business as a subsidiary and make use of the public health care-related big data managed by HIRA. Continuing with regulatory improvements, the authorities will introduce additional reform measures to allow insurance companies or their subsidiaries to provide platform-based digital health care-related services and to reduce cost and time for business registration. On July 8, 2021, six insurance companies gained approvals for making use of the public health care big data managed by HIRA. In the utilization process, the authorities will ensure that the public data is being used for enhancing convenience and lowering costs for health care users. A consultative body on big data will be set up to manage the safe usage of public health care-related data. The authorities will continue to work on regulatory reforms to promote the role of insurance business in health care-related services while encouraging mutual cooperation between the insurance and health care industries. * Please refer to the attached PDF for details.
Jul 08, 2021
- FSC Introduces Guideline on the Use of Artificial Intelligence in Financial Services
- The FSC held a consultative body meeting on digital finance via teleconference on July 8, chaired by Vice Chairman Doh Kyu-sang, and introduced a guideline on the use of artificial intelligence in financial services to bolster public trust in AI-based financial services and continue to promote innovation in financial industry. All financial and finance-related institutions offering financial transactions and other customer oriented services using AI technologies should follow the guideline which sets forth the least necessary level of standards for AI. Key details of the guideline are as follows. a) (Responsibility) Establishment of three internal control mechanisms, such as adopting ethical principles for AI, designating an internal organization overseeing the entire process of AI-related services and maintaining a risk monitoring and management system for potential risks of privacy breach b) (Accuracy and Safety) Management of the origin and quality of data used for machine learning and establishing a privacy protection system to prevent abuse or misuse of personal financial data c) (Transparency and Fairness) Maintaining a bias control mechanism to prevent discriminatory services against certain consumer groups and pursuing fairness in service provision by establishing and evaluating impartiality standards d) (Consumer Rights) Adequate provision of explanations to financial consumers on AI-based financial services to help consumers better understand and practice their rights e) Equivalent level of safety and security measures applied to AI-based financial services developed and operated by third-party contractors. The authorities plan to begin applying the guideline within this year after a sufficient time for preparatory work. Based on this guideline, financial industry groups will draw up more detailed guidelines tailored to the needs of specific sectors. In the third quarter, the authorities also plan to announce plans for a data library and an AI testbed to c
Jun 29, 2021
- FSC to Promote IP Financing for Young Startup Entrepreneurs
- FSC Secretary General Kim Tae-hyun attended the 3rd intellectual property-backed financing forum held on June 29 and delivered congratulatory remarks underscoring the progress of IP financing and its significance for young startup entrepreneurs. The following is a summary of Secretary General Kims remarks. The governments pursuit of financial innovation has led to remarkable improvements in promoting movable-asset backed financing. The total volume of movable-asset backed financing has surged from about KRW700 billion at the end of 2018 to more than KRW3 trillion within 2 years. In this period, IP-backed financing grew more than fourfold from KRW300 billion to about KRW1.4 trillion. Intellectual property enhances financing opportunities for startups. IP helps to raise companys value and provides a shield against technology theft. It also offers opportunities to attract investments for startups to grow and expand overseas. As such, the FSC has been working to promote IP financing along with relevant institutions in support of young entrepreneurs and startups. First, the government has helped to create an investment fund for IP financing in the amount of KRW500 billion for 2019-2022 to help with the financing needs of innovative firms. Second, the authorities have been working to provide more guarantees through IP financing, offering about KRW300 billion in guarantees to help innovative firms every year. Lastly, the government has been working to boost accessibility for young entrepreneurs in close coordination with startup incubators. Educational programs and other financial support are available for young entrepreneurs and startups through D-Camp and Fintech Center Korea. Todays forum will shed a new light on the importance of IP financing as a means to support young startup entrepreneurs. The FSC will continue to work on promoting IP financing in close cooperation with relevant institutions. * Please refer to the attached PDF for details.
Jun 24, 2021
- FSC Grants Final Approval for Additional MyData Business Entity
- The FSC decided to grant a final approval for MyData business to Aiji Net, an AI-based insurance fintech company at its regular meeting held on June 24. Since its preliminary approval process, the authorities found that Aiji Net has taken steps to bolster organizational structure and set up a team tasked with consumer protection. At the meeting, the FSC also granted preliminary approval for six out of seven entities including Daegu Bank, Jeonbuk Bank, KB Capital, Kyobo Life Insurance, Shinhan Life Insurance and KB Insurance. The addition of three insurance companies that have passed the preliminary approval stage is expected to help diversify MyData service areas. The FSC will continue to process new applications for MyData businesses every month and promptly carry out the application review and approval process. * Please refer to the attached PDF for details.
Jun 24, 2021
- 2021 Korea Fintech Week Brings About Tangible Outcome for Fintech Advancement
- The 2021 Korea Fintech Week has attracted about 250,000 online visitors so far since its opening on May 26. The offline to online availability of diverse opportunities for exhibition, education, investment and employment has provided important venues for fintechs, financial companies, relevant institutions and individuals seeking jobs in the industry. Through offline IR events and virtual meetings, 29 fintechs were able to attract investments in the amount of about KRW133.7 billion. A total of 54 fintechs, financial companies and relevant institutions participated in the online job fair through which up to 175 individuals will be given job opportunities in fintech or finance sectors. In this years event, 39 foreign-based fintechs, financial companies and investors from 13 different countries participated in online exhibitions, which provided opportunities for global cooperation and overseas expansion. The Korea Fintech Week also featured many expert speakers providing latest trends in the global fintech industry and relevant policy issues. * Please refer to the attached PDF for details.
Jun 17, 2021
- One-stop Credit Card Reward Points Redemption Service to be Available from Payinfo.or.kr
- The FSC announced that the one-stop credit card reward points redemption service will also be available from the Account Info website (www.payinfo.or.kr) starting from June 17. As the reward points redemption service became available on January 5 this year through the Account Info mobile application, the total amount of reward points that have been redeemed by users reached more than KRW200 billion in just about four months. In order to make this service more accessible to a wider range of groups including non-mobile users, a general web-based service will also be launched on June 17 at payinfo.or.kr.As such, the reward points redemption service will be accessible from personal computers as well as mobile devices. As of the end of May 2021, KRW203.4 billion in credit card reward points have been redeemed with the total number of applications standing at about 179.9 billion cases. In addition, the total amount of money that has been withdrawn from inactive or dormant accounts using the Account Info mobile app reached KRW18.21 billion at the end of May. In total, some KRW221.6 billion in credit card reward points and dormant/inactive account funds has been claimed by financial consumers. The authorities will continue to work on improving convenience for financial consumers. * Please refer to the attached PDF for details.
Jun 16, 2021
- Authorities to Upgrade and Simplify Unclaimed Insurance Benefits Process
- The FSC announced that the authorities are working on upgrading and simplifying the process of finding unclaimed insurance benefits with a goal to finish up upgrading the system by the third quarter of this year. When system upgrades become ready, insurance beneficiaries can search for unclaimed or dormant insurance benefits and make claims for disbursements at once on the same website (http://cont.insure.or.kr). The unclaimed insurance funds search website was launched in December 2017 to help beneficiaries find their unclaimed insurance benefits more easily. The FSC has also carried out a campaign to help more beneficiaries get disbursements by sending out letters to all insurance holders with unclaimed benefits since the end of 2017. As a result, the number and the amount of disbursements has increased significantly. In 2020, about KRW3.3 trillion in disbursements has been made out in more than 1.35 million cases. In 2021, the cumulative amount of disbursements has already reached KRW1.4 trillion in about 495,000 cases by the end of April. As there still exists about KRW12.6 trillion in unclaimed insurance funds, the authorities will continue to work on informing beneficiaries about their unclaimed benefits while making improvements to the unclaimed insurance funds search website. * Please refer to the attached PDF for details.
Jun 10, 2021
- FSC Grants Preliminary Approval for Kakao Pay's Digital Insurance Business
- The FSC decided to grant preliminary approval for Kakao Pays digital insurance business at its 11th regular meeting held on June 9. The authorities decided that Kakao Insurance has met all necessary requirements under the Insurance Business Act for the operation of an insurance business. This is the first time that the FSC is granting preliminary approval for digital insurance business to a new entrant (non-insurer). The FSC expects that Kakao Insurance can help improve consumer convenience and promote competition and innovation in the insurance industry by launching insurance products linked to digital technologies and platform services offered by Kakao. The addition of Kakao Insurance will also have a positive impact on promoting the overall non-life insurance market. Kakao Insurance can apply for the final approval from the FSC within six months from now after taking steps to meet the capital, human resources and infrastructure and facility requirements set forth by the relevant law. * Please refer to the attached PDF for details.
Jun 09, 2021
- FSC Grants Toss Bank Final Approval to Operate Digital Banking Business
- The FSC decided to grant final approval for Toss Bank at its 11th regular meeting held on June 9. Toss Bank will begin its digital banking operation as soon as September this year after completing necessary preparatory works. Toss Bank is the third digital bank that will be launched in Korea after K Bank and Kakao Bank that gained approval from the FSC in December 2016 and April 2017, respectively. After a close examination on the entry requirements, the authorities found that Toss Bank has met all requirements needed to gain a final approval. However, in order to ensure a seamless progress for its business growth, the authorities introduced a condition that Toss Bank closely follow up with its capital increase plan until 2025. FSC Chairman Eun Sung-soo stated that the new digital banks addition to digital banking industry will help broaden consumer choice and increase competition and innovation in the financial industry. Toss Bank is expected to begin its operation as early as in September this year. The FSC and FSS will operate an on-site support team to ensure a smooth takeoff of the new digital bank. * Please refer to the attached PDF for details.
May 31, 2021
- Tech Financing from Banking Sector Continues to Rise for Innovative SMEs
- The FSC announced the tech financing performance of banks for the second half of 2020. Among large-sized banks, the IBK and KEB Hana bank raked high, while Kyongnam and Busan Banks showed outstanding records among small-sized banks. The result of banks tech assessment capability also shows that the total number of banks that have completed setting up their own tech credit evaluation systems and are fully capable of extending loans based on their own tech credit assessment also increased to nine as one more bank joined the rank. Tech financing has become an important channel to raise funds for innovative SMEs that have technological prowess and future growth potential. Since its introduction in January 2014, the outstanding balance of tech financing loans continued to rise to KRW266.9 trillion as of the end of 2020.With active participation from the banking sector, tech financing has become widely in use. More recently, tech financing has moved into intellectual property and movable asset-based lendingas well. The authorities plan to work on making improvements to the tech financing system to continue to provide support for innovative SMEs. To improve consistency and credibility of tech credit evaluation systems between banks and TCBs, the authorities will help establish a standardized tech evaluation model during the second half of this year. The authorities also plan to gradually phase in tech credit evaluation into a comprehensive credit rating model for businesses. * Please refer to the attached PDF for details.
May 31, 2021
- Open Banking Available from Credit Card Companies
- The FSC announced that open banking service will be available from mobile applications of major credit card companies starting from May 31. Shinhan, KB Kookmin, Woori card companies will make their open banking services available from May 31, with Lotte, Samsung, Hyundai and Hana card companies expected to join from June to August this year. Open banking was launched in December 2019 and has become widely in use. It has attracted some 80.2 million users cumulatively with more than 146.6 million accounts registered as of May 24, 2021. With credit card companies now offering open banking services, consumers are able to check their account balances and make mobile money transfers by using mobile applications of credit card companies while checking their monthly credit card usage on a banking application. Credit card companies will need to offer a more integrated financial service platform that provides the function of balance inquiry and mobile money transfer beyond their traditional payment-related services. In a similar vein, banks will now be able to develop a more customer-oriented business model that offers analysis on spending patterns, etc. Beyond open banking, the FSC will pursue open finance, a mutual opening up of finance-related services by financial sectors and fintechs through standardized mechanisms. The authorities will continue to work on making improvements to open banking by exploring potential links to new services and other industries and seeking ways to expand open banking services and its functions. * Please refer to the attached PDF for details.
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
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.
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
May 12, 2021
- FSC Issues Preliminary MyData License to Kakao Pay
- The FSC decided to grant a preliminary MyData business license to Kakao Pay on May 12. The authorities decided that Kakao Pay meets the financial, professional and other infrastructure-related requirements needed to operate a MyData business, including a minimum capital of KRW500 million, etc.It is expected that Kakao Pay will apply for a final license approval within May this year. The authorities plan to promptly move along the licensing process for prospective MyData businesses to help improve convenience for financial consumers. * Please refer to the attached PDF for details.
Apr 29, 2021
- Short Selling to Resume for KOSPI 200 and KOSDAQ 150 Stocks from May 3
- The FSC announced that stock short selling will resume for KOSPI 200 and KOSDAQ 150 stocks beginning on May 3 as the authorities completed making necessary improvements to the system. The improvements made to the short selling system include the following. a) Introduction of stronger monetary sanctions and criminal penalties on naked short selling and other illegal short sale activities (in effect from April 6) b) Establishment of illegal short selling detection system (in place from March 16) c) Expansion of short selling access and opportunities for retail investors (KRW2.4 trillion in stock lending becoming available compared with KRW40 billion at the end of 2019) d) Overhaul of the market maker system to reduce market makers share of short selling volume With the partial resumption of short selling, the authorities will closely monitor markets to expand the availability of statistical information on short selling activities and to maintain a quick response system. Statistical data on short selling can be accessed at the Korea Exchanges website (http://data.krx.co.kr). * Please refer to the attached PDF for details.
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.
Apr 20, 2021
- Financial Authorities to Hold Online Information Sessions for 'Innovative Financial Service' Providers
- The FSC announced that the financial authorities will hold online information sessions on the regulatory sandbox programbetween April and June for forty-two innovative financial service providers that showed interest in attending. The online information session (online.fintech.or.kr) will be held on every Tuesday, Wednesday and Thursday from April 21 until June 2 in order to more actively communicate with businesses and seek solutions to their needs. Officials from the FSC, FSS and Korea Fintech Center will answer questions and provide explanations on the additional benefits granted by the revised Special Act on Support for Financial Innovation which is scheduled to go into effect from July 21. The innovative financial service providers that are not able to join in the April-May sessions and wish to participate in online information sessions scheduled for June-July should apply at online.fintech.or.kr by Thursday, May 20, 2021. In the second half of this year, the authorities plan to hold information sessions for fintech labs operated by financial institutions. * Please refer to the attached PDF for details.
Apr 14, 2021
- Three More 'Innovative Financial Services' Added to Financial Regulatory Sandbox
- The FSC designated three additional financial solutions as innovative financial services on April 14, bringing the total number of designated services to 142 since the regulatory sandbox was first launched on April 1, 2019. The FSC also made changes to the supplemental requirements of four previously selected businesses and extended the regulatory exemption period on eleven other services. Overview of Newly Added Innovative Financial Services 1.A blockchain-based digital real estate securities platform which is expected to expand retail investors investment opportunities in small- and medium-sized commercial properties (Lucentblock 6 trust companies, expected in H2 2021) 2.A digital real-name verification service for bank branch visitors which does not require customers to present their physical ID verification cards (Busan Bank, expected in Jun. 2021) 3. A mobile-based contactless bank account opening service using facial recognition technologies that is expected to boost consumer convenience for those who are unfamiliar with using video calls for identity verification purposes (KEB Hana Bank, expected in Sep. 2021) * Please refer to the attached PDF for details.