FSC Korea Announces Fintech Updates and COVID-19 Measures
FSC Korea introduced a new tech financing guideline, which outlines details about the specific target business sectors and relevant procedures of tech financing. The guideline specifies tech financing procedures for small and medium enterprises, banks, technical credit bureaus, and Korea Credit Information Services. The guideline aims to promote independence of tech credit evaluation by prohibiting inappropriate activities by banks and technical credit bureaus while suggesting fair professional standards. The guideline became applicable from January 2021. However, the standardized tech credit evaluation model will be made available in the second half of 2021 after the completion of system development. Until now, five tech credit bureaus and ten banks have provided tech credit evaluation service using their own evaluation models.
In addition, Doh Kyu-sang, the Vice Chairman of FSC Korea, held the financial risk assessment meeting in January to review the progress of the COVID-19 financial support programs for small merchants and small and medium- size enterprises (SMEs). FSC Korea announced the availability of additional lending support for small merchants, including lower interest rates and guarantee fees for the second phase COVID-19 financial support program and the newly launched lending support of up to KRW 10 million for those hit by social gathering restrictions. From January 18, 2021, the second phase COVID-19 lending program for small merchants will be offered at an interest rate of maximum two percentage points lower than the previously offered levels. The banking sector agreed to lower interest rates for small merchant loans by one percentage point on December 29, 2020. In addition, KB Kookmin bank, Woori Bank, KEB Hana Bank, NH Bank, and Industrial Bank of Korea will offer an extra percentage point reduction in interest rates.
In yet another development, in December 2020, FSC Korea decided to grant preliminary MyData business licenses to twenty-one financial institutions, fintech firms, and electronic financial businesses, out of a total of thirty-five applicants. In January 2021, FSC Korea decided to grant preliminary MyData business licenses to seven more business entities: Viva Republica, Minwise Co, Coocon, Fintech Inc., Habit Factory, Standard Chartered Korea, and SK Planet. For Kakao Pay, the application review is still ongoing. FSC Korea plans to announce the final license approval results in late January. Aside from the approval process, the authorities are working on measures to strengthen consumer protection in MyData sector. The authorities plan to come up with a specific guideline in this regard in February 2021.
Related Links
- Tech Financing Guideline
- COVID-19 Financial Response Plan
- COVID-19 Lending Program
- MyData Business Licenses, January 2021
- MyData Business Licenses, December 2020
Keywords: Asia Pacific, Korea, Banking, COVID-19, Fintech, Credit Evaluation, SME, MyData, Credit Risk, FSC
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
EC Amends Rule to Extend Temporary Exemption to Apply IFRS 9Related Articles
EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package
EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.
EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway
The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.
PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks
In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.
FSB Sets Out Work Priorities for 2021
In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.
EU Publishes Corrigendum to Revised Capital Requirements Regulation
EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).
ESAs Issue Statement on Application of Sustainability Disclosures Rule
ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).
EC Consults on Crisis Management and Deposit Insurance Frameworks
EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.
HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA Proposes Standards for Supervisory Cooperation Under IFD
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE Addresses Banks in Scope of First Resolvability Assessment
BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.
