Internet Banking
Internet specialized banks are expected to appear sometime next year. Also, regulations on capital for electronic financial businesses will be eased in order to help Information Technology (IT) services companies advance into the financial business.
On Dec. 19, Chairman Shin Jae-yoon of the Financial Services Commission (FSC) said in a press seminar held in an auditorium at Korea Deposit Insurance Corporation, “We will find a way to set up Internet specialized banks that fit into the domestic financial environment within next year. Also, we will push ahead with applying flexible regulations on capital of the e-finance business operators after taking into account case examples in foreign countries.”
He explained that, first of all, the FSC is planning to abolish pre-regulations like security scrutiny, so that it raises autonomy in the fintech market by re-establishing it as post-regulations in the e-finance market. He said, “We will shift the regulation paradigm in the fintech sector from pre-regulations to post-regulations. We will consider abolishing pre-regulations of the security review on IT and finance solutions, which are conducted by the Financial Supervisory Service.”
Lowering the entry barrier to the electronic financial business can be understood in the same context. Financial authorities are considering ways to lower the standard of capital of e-finance business operators, which is currently 1 billion won (US$910,000), or to apply it flexibly in consideration of conditions in the IT industry.
The FSC is also planning to come up with measures to nurture the fintech industry along with securing autonomy in the market. Shin stressed, “We are planning to open support centers for the fintech industry next year, so that we can provide consultation and financing for an entire process, from starting-up to developing and launching services. We will also increase the limit of use for electronic payment means within a range of not undermining financial stability.”
The FSC head added that a public consensus is needed regarding Internet specialized banks, saying, “In order to set up Internet banks providing services such as loans, a public consensus about major issues, including the ban of industrial capital from the financial industry and the real-name system, is needed. Regarding this issue, we need a review and decision from the National Assembly.”