Lowering Financial Entry Barriers and Boosting Vitality... Full-Scale Promotion of 'Small License'

Financial Services Commission Issues Research Service Contract for Recent System Implementation

[Asia Economy Reporter Kim Hyo-jin] The introduction of the 'Small License' (small-scale licensing) system, which relaxes regulations by dividing licensing units to allow financial companies to be established with small capital, is being actively pursued.

According to financial authorities on the 15th, the Financial Services Commission (FSC) commissioned a study on the "Introduction of Small License and Improvement Measures for Financial Company Business Scope such as Ancillary, Concurrent, and Outsourced Operations" on the 13th. The outline is expected to be released around December.

The FSC decided to conduct the study based on the judgment that the need for improving systems related to business scope has increased due to changing consumer demands, the emergence of innovative startups, and the acceleration of convergence between the financial industry and other sectors.

The Small License system is operated in countries such as the United States, the European Union (EU), the United Kingdom, Japan, Hong Kong, and Singapore, with the aim of lowering entry barriers to the financial industry and breaking up monopolistic structures. By dividing licensing units into smaller parts, companies with relatively insufficient capital can obtain approval only for core operations and conduct business.

At the end of last year, the FSC announced the concept of introducing the Small License as part of the "Fintech Scale-up Strategy to Accelerate Financial Innovation." In his New Year's address this year, FSC Chairman Eun Sung-soo expressed his commitment, stating, "We will actively encourage fintech investment by lowering financial entry barriers through the full-scale implementation of fintech scale-up, extension of the financial regulatory sandbox special period, and granting of small licenses."

Once the Small License is introduced, various innovative financial services currently being tested under the financial regulatory sandbox system are expected to expand further, enabling a wider range of companies to enter the market.

The FSC explained, "Fintech startups specialized in specific services and big tech companies (large information and communication companies) have entered the financial industry in large numbers, continuously requesting the lowering of entry barriers," adding, "Demand for new and differentiated services is growing, and the related market is expanding."

Through this study, the FSC plans to identify ▲ the current status and issues of licensing units by domestic financial sectors ▲ the current status and issues of business scope by domestic financial sectors and related systems, and analyze overseas cases to derive comprehensive improvement measures.

Additionally, the study will explore ways for existing financial companies to expand their domains into financial and lifestyle platforms and smoothly enter non-financial industries such as ICT. The FSC plans to complete the study within the year and immediately proceed with the preparation and improvement of related systems.