Innovative Finance No.1 'Live M' 100,000 Customers Fear Damage Amid Union Opposition (Comprehensive)

Conflict Between Labor and Management at the Crossroads of Business Extension
Financial Services Commission Designated 139 Innovative Financial Services Through Regulatory Sandbox Over the Past 2 Years

[Asia Economy Reporter Park Sun-mi] The 100,000 customers subscribed to KB Kookmin Bank's budget phone business 'Liiv M,' designated as the Financial Services Commission's (FSC) 'No. 1' innovative financial service, are at risk of suffering due to the union's obstinacy. Over the past two years, the FSC has achieved the designation of 139 innovative financial services through the implementation of the financial regulatory sandbox, but since the 'No. 1' service has been embroiled in noisy disputes, concerns over whether to extend the designation have deepened.

According to the financial sector on the 9th, the KB Kookmin Bank union plans to hold a rally in front of the FSC on the 14th to oppose the re-designation of the Liiv M business as an innovative financial service. Liiv M is a financial and telecommunications convergence service launched in December 2019 after KB Kookmin Bank became the first in the banking sector to receive approval for an innovative financial service from the FSC in April 2019. The decision on whether to re-designate the service will be made at the FSC's regular meeting on the 14th, marking two years since its designation.

The union argues that Liiv M not only interferes with the bank's core business operations but also increases the workload on employees. At the labor-management council held the previous day, the union raised issues regarding the extension of Liiv M with management but failed to facilitate smooth dialogue. The union stated, "We oppose the continuation of the Liiv M business, but management only repeats general statements without presenting clear alternatives," adding, "If management's stance does not change, further dialogue will be impossible."

FSC to Decide Next Week on Re-designation of Liiv M as Innovative Financial Service

KB Kookmin Bank, which views the extension of the Liiv M business as a win-win for the bank, employees, and customers, is exploring various methods to persuade the union as the FSC's decision date approaches.

Ahead of the re-designation review, KB Kookmin Bank recently officially requested the union for business consultations related to Liiv M. However, the union insists that "management must first apologize for previously identified violations of the innovative financial service approval (additional) conditions, such as posting performance reports, and present measures to prevent recurrence," maintaining that consultations can only proceed if there is an improvement plan including measures to limit performance pressure.

Having attracted 100,000 subscribers over two years, KB Kookmin Bank is anxious that Liiv M might fail to secure service re-extension due to union opposition. A bank official expressed concern, saying, "KB Kookmin Bank is preparing various countermeasures in case the Liiv M service is discontinued, but the process of responding or the service suspension itself could lead to a loss of consumer trust." The official added, "The union should reconsider from a customer-centric perspective whether the suspension of Liiv M, which is moving toward launching consumer-focused pricing plans, is truly the best choice for customers."

The FSC, which must demonstrate innovative financial achievements, cannot help but feel burdened by the union's strong opposition. Although the union's resistance itself may not decisively affect the FSC's review, there is concern that the re-designation of innovative financial services by the FSC could lead to intensified labor-management conflicts, ultimately causing harm to financial consumers.

FSC Chairman Eun Sung-soo emphasized at the Innovative Finance Review Committee that efforts to solidify the financial regulatory sandbox would be thorough, stating, "For sustainable innovation, it is essential to understand the positions of related stakeholders and to communicate and coordinate sufficiently."

FSC Designates 139 Innovative Financial Services Over Two Years

Meanwhile, since launching the 'Financial Regulatory Sandbox' system on April 1, 2019, the FSC has designated a total of 139 innovative financial services over two years. Once designated as innovative financial services, regulations such as licensing and business conduct are deferred or exempted for up to four years, allowing ideas and technologies to be quickly tested and commercialized. Currently, 78 services are being tested in the market, and by the first half of this year, a cumulative total of 108 services are expected to be launched.

Among the government's total 433 regulatory sandbox cases, financial innovation accounts for 32% (139 cases), followed by the Ministry of Trade, Industry and Energy with 27% (116 cases), the Ministry of Science and ICT with 21% (90 cases), the Ministry of SMEs and Startups with 15% (65 cases), and the Ministry of Land, Infrastructure and Transport with 5% (23 cases). The benefits gained from innovative finance include enhancing convenience in financial life and reducing financial usage costs. The FSC plans to hold the Innovative Finance Review Committee twice quarterly this year and to strengthen the financial regulatory sandbox system.

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