"Need for Regulatory and Institutional Improvements for Fair Competition Between Big Tech and Financial Companies"

Hana Financial Research Institute Report on 'Big Tech Companies' Entry into Finance and Strengthened Regulations'

Table: Hana Financial Management Research Institute

[Asia Economy Reporter Park Sun-mi] As big tech companies add payment systems to their core businesses and emerge as a threatening presence in the financial industry, calls are growing for regulatory and institutional improvements to ensure fair competition and collaboration between big tech and financial companies.

Lee Ki-hong, Senior Researcher at Hana Financial Management Research Institute, recently stated in the report "Big Tech Companies' Entry into the Financial Industry and Strengthening of Regulations" that globally, big tech companies are rapidly growing by providing customers with innovative services differentiated from traditional financial companies. Along with developing financial products and services tailored to the characteristics of big tech customers, new financial services targeting the digitally savvy MZ generation are being launched, and financial services that combine existing businesses with innovative technologies are being offered to customers.

Researcher Lee said, "Due to the expansion of market dominance by big tech companies, antitrust regulatory issues are emerging worldwide," adding, "For example, the U.S. House of Representatives investigated the monopoly status of GAFA (Google, Amazon, Facebook, Apple) and found that these companies undermined entrepreneurship through unfair practices and infringed on consumer rights, freedom of the press, and privacy." He also explained, "Chinese big tech companies that independently entered the payment market occupy over 90% of the mobile payment market, sparking monopoly controversies."

He said, "In South Korea as well, the expansion of market dominance by big tech companies such as Naver and Kakao has intensified competition within the industry and brought monopoly issues to the forefront," adding, "In this regard, discussions on regulatory and institutional improvements between big tech companies and financial firms are underway, and the Financial Services Commission is reviewing bilateral institutional improvements aimed at financial regulations that can promote fair innovation for both financial companies and big tech through the ‘Digital Finance Council.’"

Researcher Lee advised, "Various global big tech companies have started entering the financial industry by adding payment systems to their platform ecosystems to provide customers with highly convenient financial services," and emphasized, "We also need to create a financial environment where collaboration and fair competition between financial companies and big tech can take place to prevent issues of an uneven playing field."

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