S. Korea should improve fintech regulations for sustainable growth: BCCK

In order to drive the sustainable growth of the fintech industry in the post-coronavirus era, South Korea needs to improve its regulatory frame, the British Chamber of Commerce in Korea has said.

The BCCK’s fintech committee, which kicked off in December last year, has released its first white paper to highlight how the current COVID-19 pandemic is accelerating the digital transition across the world, officials said Sunday.

Outlining the best practices and policy suggestions on the latest fintech trends -- including open banking, MyData, central bank digital currency, and digital ledger technology -- the paper also looked into the existing regulatory issues here.

“There is a strong correlation between sustainable growth of the fintech industry and the Korean government’s recently announced Digital New Deal,” said Jung Eun-young, CEO of HSBC Korea and member of the fintech committee.

“Korea’s financial services have a high potential for innovation in the next wave of economic growth.”

In order to create synergy with such uptrend, Asia’s fourth-largest economy should move toward improving its current regulations related to fintech, according to the BCCK.

“Korea has paved the way for the development of MyData by amending its three major data laws this year, but the scope of application programming interface still remains limited, especially for institutions outside the scope of open banking and MyData,” the report said, calling for APIs provision expansion.

Also, considering the entry of third-party providers in the fintech market, policymakers should establish cybersecurity risk management controls within the open banking and MyData ecosystem, the BCCK said, suggesting the European Union’s Cybersecurity Act as a plausible benchmark model.

Recognizing that the central bank digital currency could be a radical disruptor in the payment system, the chamber advised the Bank of Korea to continue active investment in CBDC development.

“This publication is a significant step that the BCCK is taking to support the Korean fintech industry, based on the experience of the UK fintech market,” said BCCK CEO Sean Blakeley.

Representing a spectrum of British, international and Korean member companies with commercial interests in Britain, the BCCK works to advance Britain’s trade, commerce and investment in Korea and to encourage the bilateral business cooperation.

By Bae Hyun-jung (tellme@heraldcorp.com)