FSC Korea Targets Fair Competition, Data Safeguards for Financial Sector

Source: Regulation Asia Editors, Regulation Asia 2020-07-22

FSC chairman Eun Sung-soo is eyeing regulatory reforms to ensure fair competition, data security, and consumer protection as bigtechs enter financial services.

South Korea’s FSC (Financial Services Commission) is working to ensure fair competition between bigtechs, fintechs, and traditional financial services firms as a way to advance the financial industry.

In talks held on Tuesday (21 July), FSC chairman Eun Sung-soo highlighted the inevitability that bigtechs and fintechs will bring about change and innovation in the financial sector.

As such, he urged for traditional financial companies, bigtechs and fintechs to “build mutual understanding” and establish cooperative relations with each other. Bigtechs in particular should adhere to the principle of fair competition, with respect for existing regulations and financial laws, he said.

Bigtechs and fintechs alike should work to ensure the security of financial data and consumer protection, while also working to prevent conflicts of interest with their non-financial services functions, Eun said.

Meanwhile, traditional financial firms should focus on improving consumer convenience and on developing innovative ways to provide financial services – efforts Eun said the government will support.

To level the playing field in the financial industry, the government will also establish a regulatory foundation for fair competition, for instance by using the sandbox programme.

According to Eun, the FSC will set up a joint public-private consultative body composed of officials and experts from the government, financial institutions, fintechs and bigtechs in the third quarter this year – discuss regulatory reforms to deal with the emergence of new risks associated with digital technologies.

Tuesday’s discussion reflects comments Eun made earlier this month. At a recent seminar to celebrate the 9th annual Information Protection Day, Eun vowed to induce fair competition between conventional financial companies and bigtech groups, in preparation for a digital shift in the financial sector.

He also highlighted a need to revise the Electronic Financial Transaction Act to impose requirements on companies engaged in financial services to strengthen cybersecurity and enhance safeguards for protecting customer funds.

A day later, at the Korea Economic Forum in Seoul, Eun said the biggest challenge as bigtechs like Naver and Apple expand into financial services will be around creating cooperation between the existing finance industry and tech firms, while minimising negative impacts such as risks to customer data.

FSC

FSC Korea Targets Fair Competition, Data Safeguards for Financial Sector

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