Banking and Ancillary Business Significantly Expanded... Support for Launching 'Financial Super App'

Financial Services Commission Chairman Holds Banking Industry Meeting with Commercial Bank CEOs and Related Institution Heads

Financial Services Commission Chairman Ko Seung-beom attended the National Assembly's inspection of the Financial Services Commission held by the National Assembly's Political Affairs Committee on the 21st and received a report from an official during the inspection. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Jin-ho Kim] The Financial Services Commission announced on the 28th that it will actively expand concurrent and auxiliary businesses to promote the development of the banking industry. It also stated that it will improve the system to enable a 'Digital Universal Bank' where all services such as banking, insurance, and securities can be used through a single app.

The FSC announced that on the same day, it held a 'Banking Industry Meeting' chaired by Financial Services Commission Chairman Ko Seung-beom at the Bankers' Hall in Jung-gu, Seoul. Attendees included Chairman Ko, the heads of seven major commercial banks (Jin Ok-dong, CEO of Shinhan Bank; Heo In; Kwon Kwang-seok, CEO of Woori Bank; Park Seong-ho, CEO of Hana Bank; Kwon Jun-hak, CEO of Nonghyup Bank; Lim Seong-hoon, CEO of Daegu Bank; Seo Ho-sung, CEO of K-Bank), and the chairman of the Korea Federation of Banks along with other related institution leaders.

At the meeting, Chairman Ko presented three measures to secure the future and competitiveness of the banking industry. He pointed out that the financial industry, including banks, is undergoing significant changes as digital transformation takes place across the economy and industry, and this should not be overlooked.

First, he pledged to actively support changes for the digital transformation of banks. He emphasized, "We will create institutional conditions for a Digital Universal Bank that provides all financial services through a single app," and added, "We will also actively support digital new business investments such as rationalizing network separation and promoting information sharing between financial and non-financial sectors."

Additionally, in response to the changing environment, he said that the concurrent and auxiliary businesses of banks for business model innovation will be actively expanded. Specifically, he mentioned improving the trust business system so that banks can serve as comprehensive asset managers and opening up investment advisory services, which were previously limited to real estate.

Chairman Ko stated, "We will also review the business performance and environmental changes of platform businesses operating as innovative financial services and expand banks' auxiliary businesses to a reasonable level."

Furthermore, he emphasized the need to continue financial innovation based on fair competition. Financial companies, including banks, should lead changes as the main agents of financial innovation, and the government promised to make continuous efforts to create a fair competitive environment.

Following Chairman Ko's opening remarks, various policy tasks to strengthen the competitiveness of the banking industry were proposed at the meeting. Senior Research Fellow Lee Byung-yoon of the Korea Institute of Finance pointed out, "Although recent bank management indicators are stable, competitive pressure from big tech and fintech continues to increase," and stressed, "It is necessary to revise business conduct regulations under the principle of 'same function, same regulation' and allow flexible auxiliary businesses to strengthen digital capabilities."

Kim Hak-soo, President of the Korea Financial Telecommunications and Clearings Institute, and Kim Kwang-soo of the Korea Federation of Banks requested, respectively, the introduction of a small license system by categorizing banking operations by function and institutional support from financial authorities to grow into a Digital Universal Bank.

Chairman Ko said, "We will review the discussions from the meeting and consider policies for the development of the financial industry," and added, "We will continue to communicate with the industry and gather opinions to promote policies going forward."