Investment in Fintech
Financial companies’ investments in fintech companies will be allowed starting next month. Still, the issue of the classification of fintech companies remains to be handled.
In fact, this type of investment has already been allowed, according to the relevant law. However, the lack of related cases and the ambiguity of the classification have acted as hurdles. Under the circumstances, the Financial Services Commission will clarify the boundary by the end of next month. The e-Finance, financial data analysis, and financial software development businesses are expected to be included in the category.
Nevertheless, the classification is no easy matter. When it comes to e-finance, a total of 68 companies are registered as of Jan. 7 this year. Some of them are committed to fintech, but others are doing multiple businesses. The 68 also includes large IT companies such as Naver, Daum Kakao, LG U+, LG CNS, CJ Systems, and SK Planet. This means the classification has to be detailed. A broad classification could result in financial companies’ acquisition of general IT firms or investment for funding purposes. The effect of the permission is likely to shrink if excessively strict restrictions are applied.
In the meantime, the commission is going to relax the regulations applied to credit card companies regarding the scope of business in which their manpower, assets, and facilities can be utilized. The companies can report their new business scopes seven days prior to the start of such businesses. Also, the commission is planning to hold seminars so that new types of financial products can be released based on the use of big data.