Seoul launches sandbox committee for innovation
Financial Services Commission Chairman Choi Jong-ku speaks during a meeting to launch a regulatory sandbox committee at the government complex in Seoul, Monday. Yonhap
By Park Hyong-ki
The Financial Services Commission (FSC) has launched a committee consisting of experts and policymakers that will finalize the review of 19 fintech venture firms' business ideas and models this month, the regulator said Monday.
About 100 startups and financial companies' venture teams, including those from KB Kookmin and Woori banks applied for the FSC's regulatory sandbox program from Jan. 23 to Jan. 31, 2019.
The FSC has shortlisted the applicants to 19 companies, which will soon be able to experiment and develop their business ideas using the latest technologies without having to worry about whether or not they are breaking the law.
However, FSC Chairman Choi Jong-ku said at the committee's launch event that it will not only review the applicants' technological capabilities in artificial intelligence, data analysis and blockchain.
“We will see and measure their social impact through their potential services using such technologies,” Choi said.
“We hope this will lead to the creation of fintech unicorns in the market.”
He added this was in line with efforts to boost innovation through the convergence of finance and technology not only to create new accessible and easy services, but also new industries.
The country's law promoting financial innovation became effective Monday, following a revision allowing tech companies to increase their voting shares in internet banks in January.
Ahead of the implementation, the FSC launched the regulatory sandbox program in January, and accepted applications for an internet banking license in March.
The term sandbox comes from the U.S. startup community, referring to an environment that enables engineers and business strategists to work together and let their imaginations run wild, and play and build something just like children making sandcastles.
It is used as a tool to bolster innovation in fintech by paving the way for financial startups to try new, innovative methods.
Following countries such as Britain, Singapore and Hong Kong, Korea introduced the regulatory sandbox system aimed at pushing startups to launch and commercialize products and services successfully and rapidly.
Nineteen companies whose business models will be reviewed by the committee also include venture teams from KOSCOM, Shinhan Card, BC Card and NHN Payco.
Their ideas include using artificial intelligence, data analysis and mobile communications to evaluate individual credit and provide loans tailored to customers' needs.
For instance, Woori Bank's venture team handed in a business idea that enables customers to exchange currencies not at one of its branches but at cafes and fast-food restaurants.
NongHyup Property & Casualty Insurance has an idea that lets frequent travelers to get instant travel insurance as soon as they enter an airport via an application.
“We will accept more ideas for review by the end of June,” Choi said.