▲ Financial Services Commission Chairman Lee Eog-weon announces improvements to the financial regulatory sandbox system.
The Financial Services Commission (FSC) is set to significantly overhaul its financial regulatory sandbox system to facilitate the integration of innovative financial services into the formal financial sector.
The FSC announced on June 21 that Chairman Lee Eog-weon held a meeting on sandbox system improvements at the Sogang University Pangyo Digital Innovation Campus in Seongnam, Gyeonggi Province, on June 19, during an event titled "Financial Great Transformation: Changing the Fintech Landscape Beyond Regulations."
Chairman Lee stated, "The financial regulatory sandbox system has increased the dynamism of the financial ecosystem and created numerous business opportunities and jobs for young people."
As of the end of March, the system has attracted a cumulative total of 6.23 trillion won in investment and created 4,794 jobs.
However, he acknowledged, "There have been institutional limitations in supporting innovative companies to settle into the formal financial sector," and promised, "We will boldly lower the barriers to entry for the sandbox and support innovative businesses so that their efforts do not end at the testing stage but successfully transition into formal financial services."
To support the early growth of fintech companies, the FSC has decided to grant exclusive operating rights from the moment a service is designated for the sandbox.
Small and medium-sized innovative businesses granted these exclusive rights will be exempt from certain review procedures related to financial support and will benefit from higher funding limits.
Previously, such exclusive rights were only recognized once a company received formal authorization during the institutionalization phase.
The FSC has also prepared supplementary review measures and guidelines to provide flexibility in additional conditions, ensuring that startups do not struggle with issues such as a lack of financial soundness.
The post-management system will also be improved.
Operational performance will be reviewed on an annual basis immediately after the launch of an innovative financial service, and relevant laws will be promptly amended to facilitate the commercialization of excellent services.
Guidelines will be established to reduce operational uncertainties faced by innovative businesses.
High-performing innovative businesses will be provided with incentives, such as bonus points in licensing reviews or access to a fast-track process, to ensure they can continue their services as formal financial operators even after the sandbox period ends.
Furthermore, the scope of the sandbox system will be expanded to include areas such as the "Internet Primary Bank Act" to allow it to respond flexibly to changes in the financial environment.
Chairman Lee emphasized, "A true financial transformation is completed when technology and a spirit of challenge fill the blind spots of finance that existing institutions have ignored due to profitability concerns or conservative risk management," adding, "We will break down the regulatory walls that hinder innovation."
(Photo: Provided by Financial Services Commission, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.