Banks Seeking New Opportunities in Delivery and Shopping 'Land of Opportunity'? (Comprehensive)

Financial Authorities to Expand 'Platform Business' Scope
Banks Also Able to Enter Various 'Lifestyle Platform' Ventures

[Asia Economy Reporter Kim Hyo-jin] As the path opens to order food or shop through bank applications (apps), interest in the banking sector is rising regarding the specific methods, feasibility, and profit and loss structures of related businesses.

The banking sector shows a positive response in that a new business channel has been established, while also expressing concerns that, since the market already has a considerable level of competition, there is a risk of merely repeating trial and error.

According to financial authorities on the 11th, the Financial Services Commission held a 'Digital Finance Council' meeting the day before and decided to expand banks' platform business areas. Accordingly, banks will now be able to engage in various 'lifestyle platform' businesses such as food ordering and shopping services like 'Baedal Minjok' and real estate services. The financial authorities' position is to allow service launches using regulatory sandboxes even before specific institutional improvements are made.

An official from a commercial bank said, "The financial authorities' policy raises expectations for the activation of various types of platform businesses," adding, "It is significant in that banks can form diversified revenue structures beyond traditional banking."

The key issue is the content and feasibility of the business, and the general view is that it is still difficult to present a clear picture regarding this. Another commercial bank official explained, "For now, I think banks will step in cautiously and then observe the progress."

Within the banking sector, there are also cautious voices predicting participation in the business through existing investment and partnership methods. Similar to investing in startups with various innovative technologies as part of innovative finance, banks may make direct or indirect investments in promising startups engaged in food delivery or shopping businesses.

It is also explained that banks could participate in the business by embedding functions such as easy payment into delivery startups' apps or entering the market through partnerships with different types of companies like card companies.

'Infinite Potential' Observations Amid Concerns Over Trial and Error and Profitability

A bank official said, "Platform businesses are characterized by continuously integrating ideas and expanding and developing on an already established foundation," adding, "Especially, the potential for partnerships with different types of companies is infinite." Another bank official pointed out, "In other words, platform business cannot be entirely new," and added, "It might just open additional channels and, without significant profits, repeat trial and error and refinement from a long-term perspective."

Meanwhile, the financial authorities plan to allow comprehensive payment services, currently scheduled for introduction, to credit card companies to ensure fair competition between big tech (large information and communication companies) and credit card companies. The authorities also plan to establish a business regulation system in response to concerns about market dominance abuse and user damage related to big tech's entry into financial platforms.

Additionally, to enhance the symmetry of information exchange related to Personal Credit Information Management Services (MyData), the financial authorities intend to enable banks to receive consumer shopping information held by big tech companies. They will also promote the relaxation of restrictions on financial companies' acquisition of fintech company shares.

The financial authorities will also ease the face-to-face obligation for insurance planners. Considering the spread of non-face-to-face transactions, they plan to pursue various improvements to non-face-to-face solicitation regulations, such as relaxing the face-to-face obligation to at least once and allowing hybrid sales methods across channels.

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