Nominee for Financial Services Commission Chair Kim Juhyun: "Improving Geumsan Separation for Bank Innovation"

Banking Sector Likely to Open Path for Non-Financial Expansion

Image source=Yonhap News

[Asia Economy Reporter Sim Nayoung] Kim Juhyun, the nominee for the Financial Services Commission, said regarding financial regulatory innovation, "I think some basic principles like the separation of banking and commerce can be partially supplemented," and added, "We will correct the issue of the 'tilted playing field' raised by the banking sector."

At a press briefing on the 7th, Kim said, "If overseas financial companies are conducting certain businesses but our domestic banks are not, we will resolve all cases where there is no valid reason," and stated, "From the perspective of existing financial companies, if Big Tech is doing something that banks cannot, and there is no valid reason for that, we will ease the regulations."

This is interpreted as an intention to allow financial companies to enter other industries. The separation of banking and commerce is a principle that prohibits financial capital and industrial capital from owning or controlling each other's industries. Financial companies have raised issues that this law restricts their entry into non-financial sectors, preventing them from owning companies in other industries, including IT. Banks have been struggling to compete with Big Tech and FinTech, and have requested the government to improve the 'tilted playing field' problem.

Kim Kwangsoo, chairman of the Korea Federation of Banks, said before the last presidential election, "I hope that banks will be able to make investments in FinTech or lifestyle services by relaxing the 15% investment limit in non-financial companies, so that banks can actively introduce innovative services that integrate finance and non-finance," which aligns with this context.

Kim Juhyun said, "The separation of banking and commerce is a very sensitive issue; in the past, just mentioning it would cause (social opinion) to recoil," and added, "Considering the changes in the technology industry now, it is time to review whether applying the past separation of banking and commerce is appropriate or if improvements are necessary."

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