Fintech companies joined in the official launch of “open banking’ system in South Korea enabling consumers to choose all possible financial services from banking, insurance to securities brokerages can be done in one mobile platform.

“The open banking system will lower the barriers of financial institutions and encourage cooperative competition,” Financial Services Commission (FSC) Chairman Eun Sung-soo said during the launch ceremony in Seoul.

“Open finance is the future of the financial industry, and the commission will improve policies and related infrastructure to help the platform create synergy effect with data and e-finance industries.”

The open banking platform allows fintech firms to offer their simple payment and transfer services without paying high firm banking fees of 400 to 500 won per transaction.

The financial authority found that Viva Republica’s Toss and KakaoPay, the nation’s two leading fintech units, annually pay 60 billion won ($51.5 million) and 40 billion won, respectively, in transaction fees as of June this year. But their commission fees will be cut to just one-tenth or one-twentieth of the amount with the open banking platform, so they said they will expand the number of free transactions to customers from current 10 times a month.

The singularized platform also allows customers to do all of their banking jobs of different banks including account checking, money transfer and bill payment in one banking app of their choice. The financial authorities aim to introduce personalized financial services based on analysis of customers’ consumption patterns and integrated asset management through the platform.

The FSC will also invite second-tier banks such as mutual and savings banks and Korea Post to join the platform. In addition, it plans to revise the electronic financial transaction act to continuously upgrade the system.

By Jung Joo-won and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]