FSC Korea to ‘Reshape’ Regulations, Infrastructures to Boost Innovation

In a welcome speech for Online Korea Fintech Week, FSC chairman Eun Sung-soo said the regulator will pursue innovation based on three main pillars.

Korea’s FSC (Financial Services Commission) plans to offer incentives to financial institutions to encourage them to inject more capital into digital infrastructure providers, including 5G networks, artificial intelligence and big data.

The plan is aimed at supporting the government’s digital “New Deal” project, which seeks to embed digital technologies across the whole economy starting in the second half of this year.

“We are in the middle of crisis, and the Korean government is making all efforts to cushion the blow of the pandemic. But, at the same time, the government is designing new initiatives to lead the digital economy once the crisis is over,” FSC chairman Eun Sung-soo said in a welcome speech for Online Korea Fintech Week on Thursday (28 May).

The FSC will also actively support new growth engines – microprocessors, biomedical engineering, next-generation automobiles, fintech, and innovative ventures and startups.

In the financial and fintech sectors, Eun said the FSC will pursue innovation based on three main pillars – digital, big data, and non-face-to-face.

“We will reshape regulations, institutions, and infrastructures to speed up the pace of innovation in the big data and digital payment sectors,” he added, pointing to the passage of three revision laws at the start of the year, which enable market participants to analyse and utilise data “on par” with the practices ensured by the EU’s GDPR¬† (General Data Protection Regulation).

Eun noted that MyData-type business will kick from this year, which enables licensed firms to collect and analse personal financial data, marking the first year of extensive use of big data in the financial sector, which will spawn job growth in new industries.

He also highlighted the FSC’s open banking service, launched in December to boost convenience and lower transaction costs for customers by allowing them to access account services at the different financial services firms using a single mobile application.

“The Korean government will spare no efforts to enhance the extensibility and stability of the open banking system, one of the core digital financial infrastructures,” Eun said.

To ensure an adaptable and flexible regulatory framework to promote innovation, the regulatory sandbox will play a critical role, serving as a test bed for innovative financial services. The FSC will “overhaul outdated regulations” to support efforts to boost innovation in the financial sector, Eun said.

As a final point, he highlighted the importance of cybersecurity to buttress digital innovation.

“Reliable cybersecurity system is a prerequisite to ensure convenient and safe digital financial services,” he said. “We should strike a right balance between protection and efficient utilisation of data.”

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