FSC of Korea to Focus on Financial Innovation in 2020
FSC of Korea published its work plan that outlines the key policy tasks for the financial sector in 2020. The key tasks include redirecting capital flow toward small and medium enterprises (SMEs) and startups with innovative technologies and future growth potential. Another focus area of the policy work is bold reforms in financial regulations while fostering convergence between new technologies and finance, promoting inclusive finance, and establishing a reliable financial safety net to support comeback of failed businesses. FSC also designated nine additional financial solutions as innovative financial services to be added to its regulatory sandbox program, which already consists of 86 innovative financial services so far since the launching of the regulatory sandbox program on April 01, 2019.
The key financial policy tasks for 2020 are:
- Providing targeted support of financial and non-financial assistance in the amount of KRW 40 trillion to 1,000 innovative firms
- Evaluating companies based on their technologies and future growth potential and support businesses with their competitiveness and credit evaluation using big data.
- Improving financial regulatory system for a new era through the regulatory sandbox program.
- Promoting the MyData business that helps collect an array of dispersed personal data for analysis and expansion of open banking and fintechs
- Working on inclusive finance measures by establishing a debt restructuring system focusing on the needs of debtors to support and encourage their comeback from failed business attempts.
- Allowing diverse types of assets to be used as collateral by pushing for a revision of the Act on Security over Movable Property, Claims, etc. It will also help set up a movable collateral registry which will help collect collaterals and nonperforming loans on behalf of financial companies.
- Revamping indemnification provisions for financial industry workers to protect them from taking on a burden of excessive responsibilities if the loans were made through a reasonable evaluation process.
- Providing support tailored to specific needs at different stages of business including startups and scale-ups; also, helping innovative firms grow into the future and help them with successful IPOs, make companies’ future growth potential an important component of IPO requirements.
- Redirecting capital flows toward businesses from households and real estates, by introducing the new loan-to-deposit ratio that will encourage more corporate lending by financial companies.
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Keywords: Asia Pacific, Korea, Banking, Work Plan, Fintech, Big Data, SME, MyData, Regulatory Sandbox, FSC
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