[Asia Economy Reporter Kim Hyo-jin] Financial companies can now establish internal research organizations to study and develop new financial services. A service allowing small-amount investments in overseas listed stocks via mobile platforms will also be implemented.
On the 1st, the Financial Services Commission designated nine innovative financial services, including these, at its regular meeting. Since the implementation of the financial regulatory sandbox system on April 1 last year, a total of 102 innovative financial services have been designated within one year.
The financial authorities recognized an exception to network separation, allowing financial companies to operate internal financial technology research institutes that are not directly related to financial business operations and are configured and operated independently from the internal network.
Current laws such as the Electronic Financial Transactions Act require financial companies to build security infrastructure based on a network separation environment to ensure the safety and reliability of electronic financial transactions. Accordingly, financial companies must separate and block internal business systems connected to the internal communication network from external communication networks such as the internet.
Under this special exception, Korea Kakao Bank (KakaoBank) plans to establish a financial technology research institute as a corporate-affiliated research center. The purpose is to research and develop financial services based on new technologies in collaboration with fintech and IT companies.
Through this, the financial authorities expect that by broadly conducting research and development on digital new technologies such as artificial intelligence, biometric authentication, and security, it will serve as a foundation for creating new financial innovation services. KakaoBank’s financial technology research institute is expected to launch within next year.
QuaraSoft and Mirae Asset Daewoo Securities plan to launch a service in July that allows investors to invest small amounts in fractional units of overseas listed stocks on a mobile platform. This is a result of recognizing an exception to the Capital Markets Act provisions that prohibit non-face-to-face trust contracts and transactions between trust properties.
Skory Insurance Korea Branch will launch a health promotion insurance product support platform service in June under a special exception that allows reinsurers to operate health promotion service platforms after reporting to the Financial Services Commission.
This involves reinsurers operating platforms equipped with health promotion services through business partnerships with health promotion service providers and linking them with individual insurance companies that intend to sell health promotion insurance products.
The Korea Credit Guarantee Fund will introduce a factoring financial service without recourse in the fourth quarter of this year, which purchases trade receivables, provides funds to selling companies, and collects payments from purchasing companies on the maturity date of the receivables. The Fund was granted a special exception to perform factoring services, in addition to the duties stipulated by the Korea Credit Guarantee Fund Act.
By bearing the credit risk of purchasing companies on behalf of selling companies, the Fund is expected to enable selling companies to secure funds stably and improve financial soundness.
A small-amount overseas remittance service using unmanned currency exchange machines (kiosks) will also be introduced. Bellsoft will launch it in October. This service allows customers to send money overseas from Korea or receive money sent from overseas in Korea using unmanned currency exchange machines installed in hotels, subway stations, etc. The small-amount overseas remittance operator received a special exception to the regulation that requires payments or receipts to customers only through accounts.
Rainist will launch a service in March next year that provides customized management related to consumption, investment, and savings by analyzing consumers’ real-time income, expenditure, and asset data for budget management and portfolio rebalancing.
This is a result of granting a special exception under the Real Name Financial Transactions and Confidentiality Act, allowing financial companies that provide financial transaction information to applicants for the purpose of financial doctor services to obtain comprehensive consent from consumers and provide comprehensive notifications.
Hyundai Marine & Fire Insurance plans to launch a mobile insurance coupon service using an online platform in August. Dunamu and PSX will each launch services providing one-stop trading platforms for convenient trading of unlisted stocks online in September and February next year, respectively.
Financial Services Commission Chairman Eun Sung-soo said on the first anniversary of the financial regulatory sandbox implementation, "We plan to work together with fintech companies, the government, and the market to ensure that the buds of financial innovation nurtured so far bear fruit."
Chairman Eun also said, "I believe COVID-19 will accelerate the Fourth Industrial Revolution, including the expansion of non-face-to-face transactions," adding, "It is necessary to jointly consider financial innovation in preparation for the 'post-COVID-19' era."
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