Fintech's Current Landscape and Regulatory Framework in the European Union and Korea, and Challenges in Korea

Financial digitalization, supported by the development and application of information and communications technology (ICT) to the financial sector, is expected to herald more dynamic financial markets, improving the efficiency of providing innovative financial products and services. In both the European Union (EU) and Korea, this trend has intensified the convergence of finance and technology or fintech and has brought about the rapid and variegated growth of the fintech industry and companies. The financial digitalization and increasing demand for digital financial transactions, further spurred by the COVID-19 pandemic in 2020, have developed cost-efficient innovative financial services and diversified financial business models. However, the existing regulatory system needs to be restructured to accommodate the sustained and stable growth of the fintech industry in harmony with incumbent financial institutions. This paper provides an in-depth study of the fintech industry’s development and ongoing regulatory reforms in Korea and the EU (including the United Kingdom) to draw lessons from the European experiences for the most efficient and comprehensive regulatory reform in Korea.