April 27, 2024

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[THE INVESTOR] Korea's financial regulator said on March 20 it will allow financial technology startups to introduce new business applications and services without the need to comply with regulations.

The move by the Financial Services Commission is in line with a global regulatory trend to support the fintech industry in a regulatory regime called “sandbox” that addresses regulatory hurdles for smaller fintech firms using new technologies, such as blockchain and big data.

Under the initiative, fintech startups will be exempted from regulations for two years if their apps or services are determined to be “innovative” by the FSC, officials said.

If designated, fintech startups could be exempted from regulations for another two years.

If a fintech firm’s service or app unexpectedly hurts consumers’ interest, the FSC could order the firm to stop offering such services, officials said.

FSC Chairman Choi Jong-ku said the government is preparing for a new law to support the fintech industry.

By Song Seung-hyun and newswires (ssh@heraldcorp.com)