Banks set to ask president-elect to ease regulations on digital asset-related services

A row of ATM machines belonging to major banks are lined up in Seoul in this photo taken in August 2021. Korea Times file

By Yi Whan-woo

The Korea Federation of Banks (KFB), a lobby group representing lenders, plans to ask President-elect Yoon Suk-yeol to ease regulations and allow them to advance into digital assets and robot-assisted investment businesses, according to industry sources, Wednesday.

The federation's move comes as the banking sector faces a growing challenge in finding growth engines, as they are restricted from advancing into non-banking industries, while big tech giants are allowed to capitalize on their digital prowess and muscle into banking services.

KFB is working on details before finalizing its demand on behalf of the lenders and delivering it to Yoon's transition committee, possibly in early April, the sources said.

“It is noteworthy that the banks desperately want to gain a foothold in digital asset-related services,” a source said.

The areas of business they are eyeing encompass all available services using digital coins, such as crypto exchanges, crypto wallets and crypto asset management.

“The current banking law falls short of preventing a monopoly using cryptocurrency, and allowing banks with proven credibility to enter the field of digital assets will certainly help,” another source said.

Regarding robot-assisted investments, KFB argued the banks have multiple obstacles concerning MyData, a government-led project.

It aims to allow licensed service providers to collect and analyze personal data scattered across the finance sector.

This is another area where banks and big tech firms are anticipated to compete and KFB has described the situation as “an uneven playing field” for lenders.

Other demands to be made by the federation include overhauling trust management services and bancassurance, which refers to insurance products sold by banks.

The sales regulations on bancassurance make it difficult for lenders to attract subscribers, according to KFB.