Regulators in South Korea have asked local banks to open up their systems to local technology companies.
The Chairman of the Financial Services Commission (FSC), Choi noted that banks already allow their competitors to access their technology to speed up certain processes.
Currently, payment applications must have ties to a bank for their services to work. On top of that, a customer that wants to use their services must also have a bank account with the partner bank.
Under the system proposed by the FSC, a customer could access any bank via an application, without that application having to hold ties to a specific financial institution.
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“We are going to build a good environment for financial companies and startups to connect their services and transform into digital platforms that can compete with global tech giants,” said Choi. “We hope the financial companies can support the development of unicorn fintechs.”
FSC has to do its part
A local banking group responded to Choi’s statements by saying that the regulator needs to play a role in making the changes it says it wants a reality.
“The government should pursue regulatory reforms first to strengthen the financial industry and boost collaboration with fintech startups,” Kim Tae-young, Chairman of the Korea Federation of Banks, told Choi at a meeting earlier this week.
For his part, Choi has also promised that the FSC is going to reduce hurdles, which currently prevent the banking system in South Korea from opening up, for both banks and financial technology companies.
According to the Korea Times, the regulator is going to make those changes by the end of March this year, with the goal of having open-interface payment applications up and running by the end of the year.