Financial Authorities Fully Commit to Advancing Digital Finance... Comprehensive Efforts to Expand Functions and Protect Users

[Asia Economy Reporter Kim Hyo-jin] Financial authorities have decided to focus on advancing the infrastructure, industry, and market of the digital sector, including open banking. To this end, they plan to pursue amendments to the Electronic Financial Transactions Act.

The Financial Services Commission (FSC) announced fintech and digital finance innovation tasks including these measures on the 25th.

The FSC plans to expand the functions and scope of open banking by increasing participation from the secondary financial sector and establish measures to strengthen financial security and user protection within this year. The FSC also intends to introduce regulations through amendments to the Electronic Financial Transactions Act requiring all banks to standardize and provide fund transfer functions to participating institutions.

The FSC envisions establishing an institutional foundation for the leap of the digital finance industry to foster fintech unicorn companies. To cultivate financial platforms capable of various services such as simple payments, remittances, and account-based services, they plan to introduce MyPayment and comprehensive payment service providers.

MyPayment is a business type that, based on user instructions, issues payment orders to financial companies holding the user's funds to payees. The European Union (EU) introduced this in January 2018. Comprehensive payment service providers refer to platform operators that can conduct all electronic financial businesses under a single license, offering various fintech services in a one-stop manner.

Additionally, the FSC plans to establish principles of financial security that can flexibly respond to new security risks and various other risks to lay the foundation for sustainable financial innovation.

Accordingly, financial companies will establish internal control systems to manage digital operational risks from an enterprise-wide perspective beyond simple IT risk management. To enhance crisis response capabilities for financial infrastructure such as open banking, a joint crisis response system spanning from the private sector to the public sector in the financial field will be established.

The FSC will particularly raise the level of customer damage prevention obligations for private operators (such as financial companies) used as channels for voice phishing, expand collaboration between the Ministry of Science and ICT and private operators, and establish blocking systems using new technologies such as big data.

The MyData industry, which integrates and manages scattered personal credit information and supports credit scoring and financial management, will also be introduced.

Furthermore, in line with the enforcement of the 'Data 3 Act' in August, high-quality data accumulated in the financial sector will be opened to fintech, academia, and general companies to support innovation. A brokerage platform for safely trading data such as financial, telecommunications, and corporate information will be built and piloted next month.

Along with this, the FSC plans to establish a financial public data open system in the second quarter of this year that provides financial data held by nine financial public institutions, including the Financial Supervisory Service and the Korea Deposit Insurance Corporation, in the form of open APIs.

This content was produced with the assistance of AI translation services.