The Financial Services Commission (FSC) and the Korea Credit Information Institute will allow financial institutions to use the standardized Big Data of financial information in the first half of this year, FSC Chairman Yim Jong-yong said on Feb. 22.
Financial institutions will be able to reduce the number of the defaults of their loans as they can find out more about borrowers’ financial credit condition through the analyses of Big Data, financial source said.
The FSC, the Korea Credit Information Institute and the Korea Financial Security Institute had a session on Feb. 22 at the Banker’s Hall in Myeong-dong, Seoul, and agreed to make Big Data accessible to financial institutions including Fintech financial firms, as they had requested.
At the meeting, the FSC chairman said the protection of individual credit information is the top condition for making Big Data available to financial institutions. He will push for the reform of the Credit Information Law and other relevant laws to spur the use of Big Data by financial institutions as soon as possible.
The credit information institute will take the first step in releasing Big Data by including individual credit information it collects, including standard industrial statistics from Statistics Korea.
The second step is to integrate credit information from financial institutions and analyze them and return the results to the financial institutions. The move is in response to a request by the bank, credit card, and insurance firms for integrated data to analyze Big Data.
The FSC outlined its financial policy roadmap for 2016.
Financial reform to promote competition and innovation in the financial sector will be a priority.
Ten key policy tasks were laid out, including financing innovative businesses; encouraging cultural changes in finance; promoting the financial industry as new growth driver; enabling more convenient and innovative financial services; supporting the growth of household wealth; managing potential risks of household debt; managing corporate default risks preemptively; ensuring stability and fairness in financial markets; expanding policy support for microfinance; and strengthening financial consumer protection.
Financing Innovative Startups and Venture Firms
The FSC will further stimulate investments in tech startups worth 750 billion won.
“We will introduce crowdfunding system take root as a fund raising channel for startups and venture companies. We will push forward effort to bring more competition into the local bourse system,” the FSC said.
The KOSDAQ and KONNEX will be also reformed to attract more listings. The roles of policy banks such as IBK and KDB will be realigned to provide policy loans and state in accordance with their growth cycle.
Encouraging Cultural Changes in Financial Institutions
“We will continue our reform of financial supervisory practice and regulation burden on financial institutions. Financial institutions will be required to make corresponding changes in their culture such as the spread of performance-based compensation and stricter internal rules in ethics and compliance,” said the FSC.
2016 Financial Policy Roadmap
The FSC’s financial policy roadmap for 2016 focuses on financial stability. The FSC will speed up the implementation to promote competition and innovation in the financial sector and financial stability in response to internal and external stimuli.
“The FSC will continue our policy efforts to support Korean competitiveness by amending regulations and practice that hinder further development of fintech services,” the body said. “Fintech demonstration days will be held in overseas market to help domestic fintech companies to have global networking opportunities. We will continue to carry out regulatory reforms in the insurance sector as outlined in our roadmap for competitiveness of Korea’s insurance business. Capital market regulations will be amended to allow securities firms to provide better corporate financial services and expand into new businesses.”
Enabling Convenient and Innovative Financial Services
The FSC will encourage further introduction of online non-face-to-face identification, first introduced in the banking sector last year. It will be expanded into financial transactions so bank customers can easily switch their main account between banks. The system will be further improved to provide a wider range of services, such as automatic money transfer and cancellation. Internet-only banks will be launched. At the same time, the FSC will continue revision of the Banking Act to attract more diverse players into banking business.
Supporting Household Wealth Growth
We will vitalize the financial advisory business service for independent financial advisors (IFAs) to manage their wealth. Korea’s Individual Savings Accounts (ISAs) will be in this year to provide a more comprehensive asset management vehicle for households.
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