Kwangsoo Kim, Chairman of the Bank Federation, "Regulations Must Be Improved to Strengthen Bank Data Competitiveness"

The Korea Federation of Banks held an online press briefing with reporters at the Bankers' Hall on the afternoon of the 26th. Photo by Kim Kwang-soo, Chairman of the Korea Federation of Banks, answering reporters' questions.

[Asia Economy Reporter Song Hwajeong] Kim Kwangsoo, Chairman of the Korea Federation of Banks, emphasized that the most urgent improvement should be made to the 'tilted playing field' regulations that make it difficult to strengthen banks' data competitiveness, such as restrictions on non-financial business expansion and limitations on information sharing with subsidiaries.

On the 26th, Chairman Kim held an online press briefing with reporters and said, "The banking industry is striving to become the 'Netflix of finance' by enhancing data and platform competitiveness and integrating financial and non-financial services," adding, "The Federation will actively work to help the banking sector improve various regulations that restrict banks' non-financial business expansion and information sharing."

Chairman Kim also urged presidential candidates to take an interest in such regulatory improvements. He stated, "While financial support pledges related to COVID-19 and various financial pledges to address inequality and polarization are necessary, I hope to see pledges aimed at fostering the financial industry itself," emphasizing, "The financial industry is a high value-added sector that creates high-quality jobs desired by many young people and, like other industries, requires a free management environment and various support policies."

According to Chairman Kim, banks are at a significant disadvantage compared to big tech companies in strengthening data competitiveness. Big tech companies can already enter finance through the Electronic Financial Transactions Act or the Internet Banking Act, but banks' non-financial business expansion remains severely restricted, making it easy for big tech to secure both financial and non-financial data, whereas banks find it difficult to obtain non-financial data. He also expressed that the MyData system introduced this year is unfavorable to banks. Kim pointed out, "Under the MyData system, banks must provide detailed financial transaction information, including personal motives for remittances, but big tech companies provide only broad categories of their commercial information, most of which are classified as 'others,' so banks are not effectively receiving meaningful information."

Chairman Kim also announced plans to continuously propose easing the restrictions on financial companies' concurrent and auxiliary businesses to financial authorities. He said, "Regarding banks' concurrent businesses, restrictions on various asset management services such as trusts and discretionary management should be significantly relaxed, and virtual asset businesses should be added to concurrent businesses to strengthen banks' comprehensive asset management roles," adding, "I hope the 15% investment limit on non-financial companies will also be eased so that banks can actively introduce innovative services that integrate finance and non-finance."

Regarding loan loss provisions to prepare for credit risks, Chairman Kim emphasized that banks are already accumulating sufficient reserves. He explained, "Banks are conservatively viewing the market and actively building loan loss provisions as pointed out by authorities," but added, "Some argue that the size of domestic banks' provisions is smaller compared to the U.S., but unlike the U.S., Korea accumulates both loan loss provisions and loan loss reserves, so combined, the amount is by no means small."

On the resumption of the debt refinancing business, which has been on hold due to loan regulations, Chairman Kim said, "There has been no concrete discussion yet on the timing of resuming the debt refinancing business," and personally believes, "Using a debt refinancing platform may limit or provide inaccurate basic information for interest rate calculation, so it is unlikely that such a platform will be smoothly established at this time."