South Korea is being left out of a global wave of fintech alliances due to its inward-focused strategy and a lack of deregulatory reforms to respond to market changes. But the country aims to become Asia’s fintech center by building a “fintech bridge” with major nations, especially to seize the opportunity in Southeast Asia.
South Korea is trying to catch up with the global trend. On June 15, the Fintech Center of Korea, an affiliate of South Korea’s Financial Services Commission, hosted a Fintech Demoday in Singapore to promote Korean fintech firms’ entry into Southeast Asia.
However, Korea’s approach to seize the fintech opportunity in Southeast Asia does not seem to be in the right direction from two aspects:
- The strategy is focused too much on exporting Korean fintech abroad, rather than creating a financial innovation ecosystem through regulatory reforms and cooperation with other countries.
- Direct discussions are not being held among regulators. For meaningful alliances to create a more vibrant fintech ecosystem, it is important to clear regulatory hurdles through binding agreements between financial regulators.
Jeffrey Jones, an international lawyer specializing in finance comments,
It is very sad that we have one of the most tech-savvy populations on the globe, but the legal and regulatory system prevents this population from developing products and services that could create jobs for so many young people.
Such concern comes as global financial centers such as Singapore, Australia and the UK have joined hands to bolster the fintech industry and solidify their leadership position as global financial hubs. On June 16, the Monetary Authority of Singapore (MAS) and the Australian Securities and Investment Commission signed a contract to boost cooperation on financial innovation.
In May, Singapore and the UK also agreed to form a “fintech bridge” to foster financial innovation.
A version of this appeared in Korean Times on June 22. Read the full article here.