A new open banking system which is set to cut transaction fees by 90% has now entered pilot testing, Korea’s Financial Services Commission (FSC) has announced.
“During the pilot-run period, the government will conduct a comprehensive assessment of the system and make adjustments if necessary before opening the system to fintech firms on December 18,” the FSC explains.
“At first, open banking will be offered by 10 banks, and [will then be] gradually expanded to the other eight banks, as well as fintech businesses.”
Key features will include lower transaction fees and enhanced user convenience, the commission says:
- The current fee of KRW400 to 500 (US$0.34-0.43) per transaction will be lowered to about KRW40 to 50 (US$0.034-0.043) for large service providers, and KRW20 to 30 (US$0.017-0.025) for small- and medium-sized firms.
- Bank customers will be able to choose any mobile banking application to manage all their accounts in a single application without having to use separate applications for different banks.
“The government expects that open banking will boost innovation and competitiveness in the financial sectors by introducing a comprehensive financial service platform, allowing fintech businesses to adopt open banking, and improving [the] user experience for consumers,” the FSC adds.
“The lowered entry barrier for fintech firms will lead to the provision and development of better services tailored to the needs of consumers at lower costs.
“Banks will be able to diversify and widen their customer base, and grow as comprehensive financial service platforms.
“For consumers, [the] increased ability to choose between different financial services and enhanced control over personal information will lead to improved user experience.
“In 2020, the government will review an expansion of the open banking system to non-bank financial institutions, including mutual finance, savings banks and postal services.”