South Korean regulator plans Open Banking experiment
The South Korean Financial Services Commission (FSC) has announced that it will be launching a pilot project involving “a comprehensive assessment” of the potential for an Open Banking scheme.
The pilot will be reviewed in 2020
Ten banks in the country will be offering Open Banking services, while eight more will be included over an as-yet undetermined period of time.
South Korea’s government announced its intention to create a system aping the UK’s Open Banking initiative in February.
During the pilot, the current fee of KRW 400 ($0.34 cents) to 500 per transaction will be lowered to about KRW 40 to 50 for large service providers, and KRW 20 to 30 for small- and medium-sized firms. The FSC classifies SME providers to mean those that have monthly money transfers amounting to less than KRW 10 billion ($8.6 million) and account viewing activities less than 100,000.
The regulator has also said that banking customers will be able to use a single app to view their accounts across all of their accounts.
Banks participating in the new scheme will be subjected to security testing from the country’s Financial Security Institute. A 24-hour fraud detection system will also be in place throughout.
In 2020, the government will review an expansion of the open banking system to nonbank financial institutions, including mutual finance, savings banks and the postal service.
