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Regulator to launch fintech 'sandbox'

2018/03/20 14:40

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SEOUL, March 20 (Yonhap) -- South Korea's financial regulator said Tuesday 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 (FSC) 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.

The fintech sector still accounts for a fraction of the financial industry, but fintech services have rapidly won young and tech-savvy customers.

According to recent data provided by Nielsen Korea, fintech apps marked the biggest growth in the nation's smartphone app market last year.

Five of the top 10 apps from January to November last year were apps for mobile payments or financial transactions, the data showed.

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