South Korea's regulator is preparing to treat upstart fintech firms with kid gloves, in a bid to promote innovative financial services.
The country's regulator, the FSC or Financial Services Commission, will exempt fintechs from regulation from as long as two years if they are «innovative,» according to news agency «Yonhap».
The move mirrors similar efforts in Asia hubs Singapore and Hong Kong, which have both set up so-called sandboxes where fintech firms can test their services on prospective clients without being fully subject to regulation. Korea, where privacy protection is particularly tight, has lagged its larger rivals.
Fintech «Opt Out»
Specifically, the SFC will introduce an «opting out»later this year for fintechs to circumvent a 2,500-page agreement that investors must sign before data can be collected, according to Korean media reports.
If fintechs are «innovative,» they may be exempted from regulation for another two years, on top of the initial two-year reprieve, according to «Yonhap» – no word on what constitutes innovative. The FSC is drafting new law to support the fintech industry, Chairman Choi Jong-ku said.
