Korea Forms Consultative Body to Tackle Digital Finance Risks

With participation from industry participants, the body will seek to promote regulatory reform to promote innovation, fair competition and consumer safety in digital finance.

South Korea’s FSC (Financial Services Commission) and representatives from major public and private financial services providers have formed and launched a new consultative body that will work to tackle challenges arising from the era of digital finance.

The newly launched joint consultative body on digital finance will operate four thematic working groups: bigtech-fintech relations, rules and regulations, financial data security, and financial consumer protection.

During an online launch, FSC vice chairman Sohn Byungdoo spoke about the need to “continue regulatory reforms to promote innovation in financial services, build a fair competition environment for market participants, ensure consumer safety in digital finance, review risk factors related to financial market stability and evaluate the impact of digital transformation on the society as a whole.”

The call by the FSC to review the risks and impact associated with digital transformation aligns with an announcement by finance minister Hong Nam-ki that the government will intensify investments in digital infrastructure – including the ‘Data Dam project’ – to help the country address digitisation challenges stemming from the Covid-19 pandemic.

The Data Dam project, named after the Hoover Dam that helped the US overcome the Great Depression, will target seven key business areas for support, as part of efforts to boost the digital economy.

The joint consultative body agreed to meet regularly throughout this year and make its findings available to the public. The regular meetings are meant to continue consulting on how to further develop the traditional financial industry and to promote close cooperation between financial enterprises and digital platform businesses including fintechs.

The body is composed of leaders and experts representing financial sectors, bigtechs, fintechs and major financial labour unions.