Major developed countries such as the United States are leading the global market with new products. China as well has a huge domestic market and has established itself as the undisputed leader in regards to Fin-Tech (Financial Technology). These fin-tech companies use technology to make financial services more efficient. Most of these fin-tech companies are startups with the purpose of improving financial systems and corporations that count on less software.
South Korea however has not been getting the recognition as some of the other major countries in regards to have a strong fin-tech industry.
The “Fin-Tech” era is coming in 2016. On January 25th of this year, there was a revision to the Capital Markets law which made it possible for startups in Korea to start crowdfunding which made getting investments/funding much easier. Now startups can get small investments via social networks or services (SNS). The middle of this year will bring the “Internet Specialized Bank” which will help companies finance transactions through an online network without any offline stores. For example KFTC (Korea Financial Telecommunications & Clearings Institute) has built an automatic transfer integrated management service (www.payinfo.or.kr).
Korean fin-tech companies are very active in regards to projects that deal with P2P lending, crowdfunding, and payment related businesses. A Korean startup called Finda offers services that allows people to find out the right banking products. Another Korean startup called Funda is a P2P loan platform for the self-employed. These startups have joined together for joint enterprise, venture, and marketing projects.
In recent years there has been a growing trend of financial conglomerates and pin-tech enterprises joining strategic alliances. This partnership will be beneficial to both parties because financial conglomerates bring the confidence and know how while fin tech enterprises bring the ideas as well as the skill.
Korean fin-tech startup Toss is a remittance service that has gained a lot of recognition in Korea. However, many of these fin-tech startups have had problems with regulations from the government. For example a Korean payment company called “Paygate” which first developed a system that uses the minimum payment technical information such as with credit card numbers. Many might be familiar with Paypal and Alipay but many don’t realize that Paygate was the first to develop this form of payment. However, the Korean government has too many restrictions(Mandated to use an *authorized certificate) such as a Domestic Security Review for this type of payment, which is why Paypal also does not work in Korea. Paygate never had a chance to succeed because they didn’t get help from their government.
This is why having the support of the Korean government is so important for these young fin-tech companies. Last year, the Financial Services Commission in charge of financial regulations for fin-tech companies in Korea are preparing a plan to raise the fin-tech industry. The plan calls for minimum capital reduction in e-banking, simplified registrations, and the abolition of compulsory installation certifications/security programs.
*What is Authenticated Certificate?
It refers to electronic certificate that is issued by government appointed certificate authority (CA).
It contains electronic information on the entity it belongs to, the entity it was issued by, public key which is electronically signed by a trusted third party.
Authenticated Certificate ensures the personal identities of transaction parties and prevents people from tampering the documents and denying transaction history.
Scope of Use : The scope of using electronic certificates has been expanded as the use of online transactions and electronic documents has been increased. Safer transactions are guaranteed by using electronic certificates in financial, e-commercial or public sector transactions.