This is Part II of a three part series. Click here for part I. Click here for part III.
Big players are paying attention
It shouldn’t be surprising that Korea is strong in fintech. Eugene Bang is Managing Director and Country Head for DBS, a bank that hails from Singapore, another fintech hotspot. He’s also the President of the Foreign Bankers Group in Korea and brings a global view to his national role. He’s seen the success of Korean tech firms first hand and has high expectations for fintech.
“As a country with a strong IT infrastructure and many early adopters, Korea has always been a test-bed for global companies to come and test their new IT innovation. I feel that it will be the same for fintech. In light of the strong IT infrastructure and its sizable economy, Korea will become a force in the fintech revolution that is taking place in the market place now,” he says.
Furthermore, the government is committing major funds to supporting fintech growth: USD 2.6 billion, to be precise. As reported in Yonhap News, the plan is to disburse the money over a three year period. It may be some time before that money flows into actual companies as details emerge. One potential holdup to development of the industry, as in many jurisdictions, may be the regulators.
In many markets, the old tension between pioneering innovators and plodding regulators can be a major drawback. While some tech disruptors can innovate and build a business faster than regulators can keep up (hello AirBnB and Uber!), fintech exists in possibly the most heavily regulated sector in the world: finance. Min Kim, Chief Strategy Officer for DAYLI Financial Group, for one, thinks they may be the only major barrier to fintech adoption. “Korean financial firms are generally becoming more open to all fintech over the past couple of years. The real hurdle is on the regulation side.” The companies are willing, but he’s unsure if the regulators can keep pace.
Sonia Lee is the Global Partnerships Manager at D.CAMP, a startup ecosystem hub in the stylish Gangnam district. She also has concerns about the regulatory environment. She says, “Specific to FinTech, there are many obstacles to overcome in the FinTech sector in Korea largely due to heavy regulations.”
They seem to be more speed bumps rather than roadblocks. She continues in a more optimistic bent, “However, we have seen great progress in the sector, with having more than 150 FinTech startups joining the Korea FinTech Association, the major industry organization.”
Eugene Bang also hopes that regulators will enable innovators to get on with the business of innovating. He explains, “…I’m hoping that the Korean regulators continue their review and liberalization so as to enable Korea and its global partners to lead the world in the largest paradigm shift the banking sector has experienced.”
In addition to the big boys, fintech startup hopefuls also see some openings in the regulatory environment as cause for optimism. One area is forex.
At the first ever FintechO2O Pitch and Panel night in Seoul, one of the presenters in the ‘Pitch’ section of the event was Andrew Lee, Co-Founder and CEO of Ybex. Founded to take the pain out of finding a better forex deal for consumers and businesses alike, Andrew Lee is keen on Korea. To find out why, stay tuned for Part III.
This is part II of a three part series. Click here for Part III: Road to Korea for Fintech Hopefuls!
Photo: Ervins Strauhmanis