"Creating the BTS of Finance through Regulatory Innovation"… Launch of the Financial Regulatory Innovation Council

On the morning of the 19th, Kim Joo-hyun, Chairman of the Financial Services Commission, is taking a commemorative photo before the launch ceremony of the Financial Regulation Innovation Meeting at the Bankers Club in the Korea Federation of Banks building, Jung-gu, Seoul, with financial industry officials including Park Byung-won, former Honorary Chairman of the Korea Employers Federation, and Lee Bok-hyun, Governor of the Financial Supervisory Service.

[Asia Economy Reporter Song Hwajeong] The government has embarked on a fundamental review of traditional financial regulatory principles, including the separation of banking and commerce. In the era of the 'Big Blur,' where boundaries between industries are dissolving, the plan is to boldly reform financial regulations so they do not hinder the digital transformation of the financial industry.

The Financial Services Commission (FSC) reported the direction for promoting financial regulatory innovation at the 1st Financial Regulatory Innovation Meeting held on the 19th.

In his opening remarks, FSC Chairman Kim Joo-hyun emphasized, "The financial industry must develop as a dynamic sector forming a key pillar of the economy, and financial regulations should not hold it back. The goal of financial regulatory innovation is to create a new stage where players leading the global financial market, like BTS in the music industry, can emerge in the financial sector."

The Financial Regulatory Innovation Meeting received 234 industry suggestions through surveys of all financial sector associations and selected 36 detailed tasks across 9 major projects in 4 key areas: ▲promoting digital transformation ▲building innovation infrastructure ▲advancing the capital market ▲improving supervisory administration. The plan is to actively seek alternatives suitable for the expanding convergence and fusion between industries, rather than taking traditional regulatory frameworks such as separation of banking and commerce and exclusivity for granted.

First, the meeting aims to promote the fusion of services and data between financial and non-financial sectors by improving the separation of banking and commerce system and activating the use of non-financial information. Regarding the separation of banking and commerce, Chairman Kim stated, "While maintaining the basic framework for financial stability, we will prioritize reviewing ways to improve the scope of business and restrictions on subsidiary investments to enable activation of IT and platform-related operations and new technology investments."

In particular, the meeting discussed the challenges and prospects of the separation of banking and commerce regulation. Considering environmental changes and differences in financial functions such as manufacturing and sales, opinions were raised that regulations on subsidiary investments or the scope of ancillary businesses based on the separation of banking and commerce need to be changed or revised.

Professor Jung Soon-seop of Seoul National University Law School, who attended the meeting, emphasized, "In the Big Blur era where the same technology is used mixedly in financial and non-financial sectors, applying the separation of banking and commerce regulation only to the financial industry constitutes discrimination between financial and non-financial sectors. Increasing efficiency through convergence and fusion between different industries is a valid reason for easing the separation of banking and commerce regulation."

Additionally, by improving regulations on outsourcing, real-name verification, and insurance solicitation, the plan is to activate the use of external resources and digital new technologies and establish a flexible regulatory system that allows various business models such as digital universal banks and online deposit and insurance brokerage platforms. A balanced regulatory framework will also be organized to guide the responsible growth of digital new industries such as virtual assets and fractional investment.

To enhance the sense of innovation, improvements in financial supervisory administration will be pursued simultaneously. Administrative guidance, supervision, sanctions, and inspection practices will be reviewed and improved, and active support will be provided for financial companies’ overseas expansion to broaden financial territory.

The Financial Regulatory Innovation Meeting plans to hold subcommittee meetings until early next month and convene the 2nd Financial Regulatory Innovation Meeting in August. An FSC official explained, "We plan to hold meetings at least once a month to promptly propose and handle regulatory innovation tasks."

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