From December, Secondary Financial Sector Customers Can Also Use Open Banking

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[Asia Economy Reporter Kim Hyo-jin] Starting this December, customers of secondary financial institutions such as NongHyup, Saemaeul Geumgo, and savings banks will also be able to use open banking services.

Open banking is a service that allows customers to view all their accounts and make withdrawal transfers using just one application (app). Since its launch in December last year, the number of users has reached 22 million (as of September).

On the 21st, the Financial Services Commission and the Financial Supervisory Service held the 3rd Digital Finance Council chaired by Son Byung-doo, Vice Chairman of the Financial Services Commission, to discuss plans for advancing open banking.

The scope of institutions participating in open banking, currently limited to banks and fintech companies, will be expanded to include mutual finance, securities firms, and card companies. Mutual finance institutions and savings banks with deposit accounts will provide open banking services from December as soon as their system development is completed.

Card companies without deposit accounts are expected to participate in the first half of next year. The types of accounts available for open banking will also expand from current demand deposit accounts with free withdrawals and deposits to savings and installment deposit accounts. This means that deposit balances can be gathered and transferred to fixed deposit or installment savings accounts with higher interest rates at other banks.

Issues regarding transfer infrastructure that allows MyData (personal credit information management) and MyPayment (payment instruction transmission) service providers to offer services at low costs were also discussed.

Through MyData companies, it will become possible to subscribe to automobile insurance and transfer funds simply by accessing the MyData app.

Currently, there is the inconvenience of having to separately access the insurance company app (for product subscription) and the bank app (for fund transfer).

Plans are also underway for fintech companies and newly participating institutions to provide a certain level of data and for fintech companies to share part of the operating costs of the open banking network.

Son Byung-doo, Vice Chairman of the Financial Services Commission, stated, "It is essential to establish a mutually beneficial relationship between financial companies and the fintech sector by reasonably adjusting the scope of data sharing and fee burdens so that both sides can win."

He added, "We will ensure that fintech companies and newly participating institutions provide a certain level of data. While fintech companies will share part of the operating costs of the open banking network, we will also encourage a reasonable reduction of high inquiry fees, which act as a burden on smooth service provision due to the increase in users, through consultations."

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