Korea to support venture capital for fintech start-ups

The government will fully support venture capital to finance start-ups in financial technology business, as digital innovation will play a critical role in the fourth industrial revolution, Korea’s top financial regulator said Wednesday.

“With the advent of fintech and ICT-based firms, once-exclusive financial services are evolving into new types of services,” Financial Services Commission chairman Yim Jong-yong said at a forum in Seoul.

"As capital markets have large potential in innovation and change, the government will make sure that start-ups with creative ideas get enough venture capital,” he said.

Yim added that the government will help nurture a giant investment bank to invest in venture capitals.

His remarks came at the Korea Capital Market Conference 2016, the second annual event organized by major financial institutions including Korea Exchange, Korea Financial Investment Association, Korea Securities Depository and Korea Securities Finance Corp.

At the conference, experts discussed capital markets and the fourth industrial revolution.

Mike Powell, managing director Enterprise of Thomson Reuters, noted that the advancement of digital technology first hit the traditional payment system and urged the financial sector, still recovering from the global financial crisis, to seek a fundamental change.

He said block chain, a financial technology that underpins digital asset bitcoin transactions, will be “an opportunity to innovate in settlement and asset ownership registration.” Alternative financing such as crowdfunding and robo advisory will be other key initiatives that the capital market players should seek, he added.

Joel Bruckenstein, chairman of Technology Tools for Today, said robo advisory services will benefit investors in terms of low fees and quality of user experience.

He warned that human advisers who do not adapt to new technologies to meet the needs of millennials will face huge losses.

“Traditionally there has been no late adopter penalty in financial services technology. That is no longer the case,” Bruckenstein said.

Park Soo-yong, professor of Sogang University, said financial companies need to be socially open to clients, collect their various data and adopt advanced technology to be successful in the fintech area.

By Kim Yoon-mi (yoonmi@heraldcorp.com)