Throwing Opportunities Away
Venture firms and venture capital industry experts are pointing out that government regulations are hindering the development of financial technology, or fintech, companies. Fintech is a concept covering every type of information technology relating to financial services, ranging from payments and remittances to asset management and crowd funding.
“At present, any investment in a prohibited business is subject to various restrictions,” said an official at the Small and Medium Business Administration, adding, “We need to come up with measures for promoting crowd funding from an industrial perspective.”
These days, new fintech services are gaining a lot of popularity around the world. The typical examples include Alibaba’s online money market fund (MMF) and Apple’s mobile payment service Apple Pay. However, conditions are far from favorable for such fintech companies in Korea.
“The problem is not limited to crowd funding, and start-ups providing financial services like bitcoin and mobile payments still have to check first if their business pertains to the prohibited businesses,” an industry insider commented. He continued, “Government regulations are too tight in the sectors with growth potential, and it makes no sense at all that the group of new technology finance firms is free from restrictions, while venture capital firms are forced to check the prohibited business list.”
“The advent of Alibaba and Apple Pay shows that our lifestyle is changing from mobile-based purchases of goods to mobile-based purchases of financial products and services,” a University professor pointed out, adding, “A special act has to be enacted for the promotion of fintech companies like in China and Japan.”