The World's 11th-largest Alternative Finance Market
The Cambridge Centre for Alternative Finance (CCAF) said in its recent report that South Korea is currently the 11th-largest alternative finance market in the world.
Alternative finance can be defined as financial channels, instruments and processes outside the conventional financial systems. It is characterized by technology-based direct lender-borrower connection for transaction cost reduction and efficiency enhancement. The examples include crowd funding, profit distribution, online lending, P2P lending, cryptocurrency trading, mini bonds and social impact bonds.
According to the report, the size of the global alternative finance industry topped US$300 billion in 2018 with China, the United States and the United Kingdom accounting for 71 percent, 20 percent and 3 percent of the industry, respectively. They were followed by Europe (3 percent), Asia-Pacific (2 percent) and Latin America (1 percent).
The CCAF said that South Korea is a late starter in the global fintech industry and yet its fintech sector is growing very rapidly. In the country, a large number of fintech startups, including Lendit, Banksalad, Bomap and Toss, emerged in 2014 and 2015 and major banks such as Shinhan and KB are working closely with and increasing their investment in them.