Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Koscom tasked with battling AWS, MS amid 'Digital New Deal'
An ad for Koscom's financial cloud service / Courtesy of Koscom
By Park Jae-hyuk
Koscom CEO Chung Jee-seok
By Park Jae-hyuk
Koscom's self-stated mission to outdo Amazon Web Services (AWS) and Microsoft in the financial data cloud services market has taken on more significance since President Moon Jae-in announced cloud computing as one of seven projects to be pursued under his “Digital New Deal” drive, industry officials said Tuesday.
Amid concerns about foreign technology companies enjoying a “free ride” on government policies for the post-pandemic period, observers are divided over whether or not the local financial IT firm can accomplish this.
Koscom, a subsidiary of the Korea Exchange which has a 76.6 percent stake, joined hands with Naver Business Platform in October last year and opened the nation's first financial cloud data center in Seoul to meet the soaring demand for cloud services in the financial sector. Since then, it has expanded its footing in domestic financial cloud computing services.
Earlier this month, the company defeated NHN in a bid for a 3.3 billion won ($2.7 million) contract to become the financial cloud service provider for a government-led project to support fintech startups. Koscom will help local fintech startups develop new services using its cloud services. It will provide them with infrastructure as a service (IaaS) and platform as a service (PaaS) by the end of this year.
“We're already equipped with infrastructure related to financial cloud computing,” a Koscom official said. “We've prepared a lot for fintech firms to use our financial cloud services.”
But it is uncertain whether the use of its financial cloud services could spread to the private sector.
According to the Financial Supervisory Service (FSS), foreign companies, such as Amazon and Microsoft, had a 66.9 percent share in the domestic financial cloud market as of June. Although domestic players saw a steady technology enhancement, their market share stood at 14.5 percent. The remaining 18.6 percent market share was held by cloud computing services that financial companies developed by themselves.
“Because it's been less than two years since the use of cloud computing has become available in all financial sectors, Korean firms have had little time to develop their technologies and attract clients,” an FSS official said. “Given that stability is essential in the financial sector, domestic financial companies prefer to use services provided by foreign firms that have proved the stability of their systems.”
Some critics pointed out that Korea's Digital New Deal may only benefit U.S. tech firms, without supporting the growth of domestic businesses, citing foreign firms preemptively moving to cash in on the administration's policies.
Microsoft CEO Satya Nadella mentioned Moon's Digital New Deal in a letter recently sent to the President, saying that the COVID-19 crisis could serve as momentum for South Korea to grow its non-contact industries. AWS Korea also expanded its data center in Seoul this month. Google opened its data center for the first time in Korea in February, while deciding to shut down its cloud business in China.