[Yoon Seok-yeol Elected] Financial Sector United: "Please Lift Outdated Regulations"

Yoon Seok-yeol, the president-elect of the 20th Republic of Korea, is posing with a bouquet of flowers at the "People Power Party 20th Presidential Election Vote Counting Situation Room" set up at the National Assembly Library in Yeouido, Seoul, in the early morning of the 10th. [Image source=Yonhap News]

[Asia Economy Reporters Changhwan Lee, Jehun Yoo, Minwoo Lee] With Yoon Seok-yeol of the People Power Party elected as the 20th President, the financial sector has unanimously called for the relaxation of outdated regulations.

This is because the current administration has treated existing financial companies as a kind of vested interest and pressured them with various regulatory policies. There were also complaints that big tech companies were given wide access to the financial industry, creating an unfair competitive environment.

There is an atmosphere of expectation that the new administration will implement various regulatory innovation policies, such as allowing existing financial companies to enter new businesses and strengthening tax support.

Financial Sector: "Please Relax Data Utilization Regulations"

On the 10th, Kim Kwang-soo, chairman of the Korea Federation of Banks, emphasized, "I hope the new government understands that the banking industry, like other industries, is constantly changing to survive and works hard to innovate outdated regulations."

Chairman Kim demanded, "Regulations on banks' data utilization should be relaxed to enable personalized financial services. Also, please expand the scope of banks' entry into non-financial services to create conditions for developing new businesses that combine financial and non-financial sectors." The Yoon transition team views the ‘separation of banking and industry’ regulation as outdated and believes it should be thoroughly reviewed, so many changes are expected.

The insurance industry also requested deregulation to allow fair competition with IT companies entering the insurance industry.

Jung Hee-soo, chairman of the Life Insurance Association, said, "The request to improve regulations that favor big tech and disadvantage the financial sector to create a fair competitive environment is a universal voice not only of the life insurance industry but the entire financial sector. It is also necessary to relax regulations on the insurance industry's entry into healthcare and nursing service industries to promote both public convenience and growth of the life insurance industry."

The General Insurance Association also stated, "Due to recent changes and increased uncertainties in the financial industry environment, new risks are emerging, increasing the need for risk preparedness. We hope that institutional foundations for new product development and new business entry will be established, and we ask the new government for active support."

The credit card industry also demanded regulatory relaxation. The Credit Finance Association said, "Rational institutional improvements regarding credit card fees are necessary so that the card industry and card merchants can develop together. Please support the digital innovation of the card payment system so that South Korea's payment system can expand globally."

Welcoming Yoon’s Emphasis on Market Principles

Especially since there were many criticisms that the Moon Jae-in administration excessively prioritized financial consumer protection and treated financial companies unfairly, the financial sector welcomes Yoon, who emphasizes market principles.

A financial sector official said, "Regarding the incomplete sale of private equity funds, even when customers clearly agreed, it was considered a formal agreement, and financial companies were ordered to pay 100% of losses. In insurance disputes, even when insurers won in court, they were ordered to pay insurance money to customers. We hope such unreasonable incidents never happen again."

The Korea Development Bank is uneasy due to Yoon’s pledge to relocate to Busan. The bank argues, "If we leave Seoul, the economic and financial center of Korea, serious personnel outflow and operational inefficiency may occur."

The securities industry expects that if Yoon’s pledges are realized as policies, they will have a positive impact on the stock market. Yoon pledged to abolish capital gains tax on major shareholders’ stock transfers and grant preemptive rights when listing after a physical division.

In particular, the virtual asset industry has high expectations for the enactment of the ‘Digital Asset Basic Act’ and the establishment of the ‘Digital Industry Promotion Agency.’ They expect the government’s stance on virtual assets to shift from ‘suppression’ such as banning Initial Coin Offerings (ICO) to ‘promotion’ including legalization and investor protection.

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