"Fintech Association Should Be Designated as a Self-Regulatory Organization"

People Power Party, Rep. Yoon Chang-hyun, and Fintech Association Host Seminar
Need for Government Regulation Improvements Including Sandbox Advancement

[Asia Economy Reporter Kwon Hyun-ji] “Current laws alone cannot respond to rapid environmental changes. There is a greater need than ever to establish a self-regulatory system.”

At the ‘Cheer Up Fintech: Through Autonomy and Innovation’ seminar held on the 20th at the National Assembly Members’ Office Building, 2nd Seminar Room, co-hosted by the People Power Party Policy Committee, People Power Party lawmaker Yoon Chang-hyun, and the Korea Fintech Industry Association, fintech industry officials unanimously agreed that a self-regulatory environment must be created for the fintech industry to continue growing. Under the current public regulations, excessive regulation is imposed, and there can be blind spots in consumer damage relief. Currently, the fintech industry is regulated under the Electronic Financial Transactions Act enacted in 2006.

Attorney Jo Se-gyeong of Kim & Chang pointed out, “Fintech services are often new types, so there are many cases without precedents or authoritative interpretations to refer to,” adding, “Considering these industry characteristics, it is difficult for financial authorities to identify and monitor all regulatory targets with their costs and personnel, detect unauthorized or unregistered operators, or respond to new types of services and consumer damages.”

He emphasized the need to designate the Fintech Association as a self-regulatory organization. Attorney Jo said, “Organizations like the Korea Fintech Industry Association, which have a high understanding of the industry, should be designated as self-regulatory bodies so that when early signs of legal violations or consumer damages are detected, they can immediately cooperate closely with financial authorities.” He also highlighted that all financial associations, except for the electronic financial sector, are conducting various self-regulations such as disclosures and advertising reviews centered around their associations.

Additionally, opinions were raised that improvements to the public regulations themselves are necessary. Jo Jae-bak, Head of Digital Division at Samjong KPMG, said, “Regulatory sandboxes and MyData have achieved many results in terms of innovation,” but explained, “It is time to remodel systems such as advancing the sandbox to encourage fintech growth that has reached its main track.” He emphasized the need to increase regulatory predictability and continuously support the activation of existing regulatory sandboxes and MyData initiatives. He cited examples such as the Monetary Authority of Singapore (MAS) simplifying sandbox review procedures and supporting investment and networking.

Lee Dong-yeop, Director of Financial Innovation at the Financial Services Commission, explained, “We will modernize financial security regulations that can flexibly respond to the financial innovation environment and enhance the foundation for fintech startup activation and support systems.”