South Korea should develop Busan, the country’s major port city on the south coast, into a maritime finance cluster and ease regulations on the financial, especially fintech, services to vie for the next Hong Kong as Asia’s financial hub, experts from academia suggested during the 2020 World Knowledge Forum Busan on Monday.

The country must create a maritime finance ecosystem first to make Busan as the next financial hub of Asia, and the first step should be establishing a state bank for maritime finance services, Tony Michell, public policy professor of state think-tank Korea Development Institute, recommended at the 2020 World Knowledge Forum held in Busan, hosted by Maekyung Media Group.

Michell, who joined the annual business forum as a speaker to share his insights into a move in Asia’s financial center of gravity following the recent political changes in Hong Kong, suggested Busan first transforms into a maritime finance hub that can provide comprehensive finance services for the maritime industry.

He stressed Busan needs to attract maritime companies domiciled in Hong Kong to become the next Asia’s financial hub, and the best way to achieve its goal is by becoming a city where companies can get one-stop financial services for their maritime business needs.

As a first step of setting such environment in Busan, Michell recommended on establishing a state bank specializing in maritime finance services in Busan.

In a separate session on strategies to promote Korea as Asia’s finance hub, Jung Yoo-shin, Sogang University Business School professor, called for changes in the country’s finance system and relaxing regulations, including launching a regulatory sandbox, encouraging fintech’s growth and supporting digitalization in the finance sector.

A regulatory sandbox refers to a framework that allows businesses to experiment new services in controlled environment under a regulator’s supervision. It often involves temporary exemption or deferral of regulatory rules to promote innovation.

“At a time when Singapore, Tokyo, Sydney and Taiwan are fiercely vying for Asia’s financial hub, it is a must for South Korean to come up with regulatory innovation to compete against the global rivals,” said Professor Jung.

By Special reporting team (Kim Myoung-soo et al.) and Cho Jeehyun

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