Korean Government to Make Extensive Change of e-Banking Regulations, Policies

The daily limit on person-to-person transactions using mobile money transfer services like Bank Wallet Kakao will increase from 500,000 won (US$457) to 2 million won (US$1,829). The minimum capital required for e-banking registration will decrease by more than 50 percent. In addition, systems of security reviewing and certification method rating will be abolished, which will enable people to make payments using finger and iris recognition methods.

On Jan. 27, the Financial Services Commission and the Financial Supervisory Service announced a measure to support the convergence of IT with banking industries. The measure is aimed at introducing and expanding financial technology (fintech).

By June, financial authorities will get rid of all regulations that demand the obligatory use of specific technologies including the systems for reviewing security and rating certification method. As a result, payment services using finger and iris recognition technology or those using smart watches and glasses are likely to be available in the market. As for payment methods using signatures, the limit on person-to-person transactions will be eliminated. Accordingly, the allowed amount will increased from 500,000 won (US$457) to 2 million won per day and 5 million won per month (US$4,572) for Bank Wallet Kakao.

The criteria for capital needed to run e-banking businesses will be lowered as well. Right now, at least 5 billion won (US$4.6 million) is required to set up digital currency companies, 3 billion won (US$2.7 million) for companies that facilitate digital money transfers, 2 billion won (US$1.8 million) for pre-paid and debit card companies, and 1 billion won (US$914,000) for online payment service providers. The nation's two financial regulators are planning to slash the size of minimum capital requirements by more than 50 percent in the mid to long term.

Financial authorities are going to ease regulations and come up with measures to relax rules on non-face-to-face identification methods in order to introduce Internet-based banks. In particular, they will decide whether or not they will apply different rules on Internet banks, and how to reconcile the principle of separating financial and industrial capital. They will also review complementary measures and business scope adjustments with existing banks, and come up with measures to establish localized Internet banks by June.

As a result, it will be possible for companies like Samsung or Naver to open Internet banks. The two financial regulatory bodies are going to submit their recommendations to the National Assembly on changing related laws by the first half of this year. They are also planning to start modifying subordinate legislations in the latter half, in accordance with amended laws. - See more at: http://www.businesskorea.co.kr/article/8816/wide-open-industrial-capital-korean-government-make-extensive-change-e-banking#sthash.iTHcESSs.dpuf

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