South Korean FSC Chair Urges Banks to Open Up to FinTech Firms

Regulators in South Korea have asked local banks to open up their systems to local technology companies.

Speaking to a group of senior banking executives, Choi Jong-ku said that opening up banking systems to financial technology firms could improve payment options for customers.

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.

"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 Unicorn Unicorns represent privately held startup companies whose value exceeds $1 billion. The term itself was coined by venture capitalist Aileen Lee back in 2013, with Unicorns since assuming the gold standard of companies.At the time of writing, approximately 465 unicorns exist, with standouts becoming ubiquitous in everyday life. This includes Ant Financial, DiDi, Airbnb, Stripe, Lyft, and Palantir Technologies, among many others.While all wildly successful, many unicorns are themselves the product Unicorns represent privately held startup companies whose value exceeds $1 billion. The term itself was coined by venture capitalist Aileen Lee back in 2013, with Unicorns since assuming the gold standard of companies.At the time of writing, approximately 465 unicorns exist, with standouts becoming ubiquitous in everyday life. This includes Ant Financial, DiDi, Airbnb, Stripe, Lyft, and Palantir Technologies, among many others.While all wildly successful, many unicorns are themselves the product Read this Term 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 Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term 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.