Value context and insight. lkm@koreatimes.co.kr
Fintechs to get broader access to financial system
FSC Chairman Choi Jong-ku
By Lee Kyung-min
By Lee Kyung-min
―Scope to be expanded to include securities, insurers―
The government will grant fintech firms a broader access to the financial data management and operation system long used exclusively by traditional financial entities, the Financial Supervisory Commission (FSC) said Thursday.
This is to foster competition through innovation by allowing newcomers to access the data and computer network system, previously used only by the state-run entities and financial services firms.
The move lowering the entry barrier to one of the most conservative industries is likely to help increase the number of fintech firms, subsequently boosting new technology developments that will improve customer satisfaction.
The FSC said it will push for “open API,” short for application programming interface, an intermediary that enables a software program to interact with other software.
An open API, which refers to a publicly available application programming interface, allows a customer of a certain bank to use banking services including cash transfers or balance checks simply by entering words into the operating system.
This means customers will no longer have to use the digital platforms offered by banks and instead can switch over to platforms provided by fintechs with better, faster, more user-friendly interfaces.
“The government will establish a standardized system that can be used by both public and private financial entities including telecommunications firms,” the FSC said in a press release.
“Through the policy, we seek to strengthen tighter integration among various industries that could help better serve the public involving issues including but not limited to financial transactions. It will also help people stay more connected and have their needs fulfilled in a more prompt and efficient manner.”
The announcement is progress from an earlier initiative implemented in August 2016 whereby FSC and banks have jointly operated APIs.
The FSC said the program requires further development because the current service is provided to only a limited number of customers who must pay a high fee.
“We are making efforts to make the system more stable so that a far greater number of people can use it without any problem. A review on system security and data protection will be underway before we finalize the standardization for public access,” it said.