South Korea is to begin a deregulation drive to encourage investment in Internet-only banks to be introduced in the first half of 2015, the financial regulator said Tuesday, as the country hastens to match technology with financial business.
In promoting what has been named “fintech,” the Financial Services Commission (FSC) said it will ease certain measures, which include revising local banking laws that require all commercial banks to have brick-and-mortar offices and face-to-face channels with customers.
“The second-tier financial sector, such as brokerage houses and insurance firms, is free from these regulations, but the banking sector is strictly limited,” the FSC said.
“As fintech has been the most important trend in the global financial sector, there is strong demand for deregulation in fostering the financial technology industry,” the FSC said. “The current banking system focuses only on offline institutions. We will have local financial regulations reflect the new online, mobile trend.”
The regulator said it will also adjust restrictions that limit manufacturers from owning financial institutions in order to encourage large companies to invest in the online banking industry.
Under the current law, a manufacturing company is banned from holding more than a 4-percent stake in a bank.
“We’ve been considering making the rule less strict, and we are still discussing it. No details have been finalized yet,” said Son Byung-doo, head of the Banking and Insurance Bureau at the FSC.
Market watchers expect the FSC to raise the ceiling up to 20 percent to attract investment from big-name companies including Samsung Electronics Co., Hyundai Motor Co. and Naver Corp.
The real-name financial transaction regulation will be revised for online banks as well, the FSC added, as it is impossible for internet-based banks to identify the real name of an individual who opens an account in person.
The FSC said it will announce a more detailed plan during the first half of this year after completing the revisions. (Yonhap)
