SEOUL, South Korea–Under pressure to adopt an open banking system, South Korea's financial industry said it plans to move forward with a general-use digital financial transaction protocol this year so fintech companies can share financial data and build innovative business models.
Open banking allows third-party fintech developers such as startups to build applications based on APIs provided by banks and state financial bodies. South Korea’s Financial Services Commission (FSC), a state financial watchdog, has formed an open banking council with 18 banks and other inter-bank payment-related organizations, Aju Business Daily reported.
The council has proposed the operation of its joint payment system, saying it would be tested between May and October. New APIs will be open to all fintech businesses in December, Aju Business Daily said.
"Since the establishment of open banking has paved the way for new finance, we expect innovative services to flood the market," FSC Chairman Choi Jong-koo stated, adding that no businesses can be operated smoothly without proper infrastructure.
Choi said the government would do its best to nurture and promote an open banking system and vitalize the use of big data and other methods to create synergies.
Once open banking is fully adopted, people can transfer money by using any fintech or service apps and receive money from accounts registered with other banks and fintech services. Fees will cost up to about 50 won ($0.044). For unexpected service failures and help, 24-hour call centers and crisis management teams will be run, Aju Business Daily said.