Research on Korea Financial Regulatory Issues for the FinTech Development

The development of FinTech can bring out a host of new financial business model which can fill a niche not provided through traditional lending industry. For the success of FinTech industry, current statutory and regulatory regime governing FinTech in some parts are not only too old to cover the new financial business model but also not enough to protect financial consumers. South Korean government and national assembly trying to deregulate financial regulation which has been pointed out as four obstacles to FinTech development. First, the amendment of “Support for Small and Medium Enterprise Establishment Act” enables KRW 60 billion engel fund to invest FinTech in Korea. Second, Face-to-face procedure of the due diligence of CIP regulation is expected to lower the standard. For more speed and convenience, the author suggests biometric identification system could be adopted. Third, Current 4% restriction of non-banking company’s ownership of bank equity ownership is going to lower the ratio around 10~30%, which means allowing non-banking company’s “control” of bank. Fourth, Korean national assembly propose Securities Based Crowdfunding Regulations. For investor protection, however, the author insists broker-dealer’s liability for issuer’s disclosure and internet advertising regulations are necessity for securities based crowdfunding regulations. Finally, the author insists that the security-related issues must be resolved for the success of FinTech business.