South Korea launches pilot of Open Banking system

South Korea has announced it is launching 10-bank pilot of Open Banking system, according to Regulation Asia.

Initially, bank customers will be able to access services from 10 banks, before the system is expanded to other banks and fintech companies in December. 

The FSC (Financial Services Commission) and ten banks on Wednesday (30 October 2019) launched a new open banking system. First announced in February 2019, the FSC-led project will see local banks open up their APIs to a broader range of third parties including fintech companies and other banks. 

Initially, Open Banking will be offered by 10 banks – NH Bank, Shinhan Bank, Woori Bank, KEB Hana Bank, IBK, KB Kookmin Bank, Busan Bank, Jeju Bank, Jeonbuk Bank and BNK Kyongnam Bank – before it is expanded to eight other banks and fintech companies. 

The service will allow bank customers to access account services at the 10 banks using a single mobile application. To date, individuals have had to use of different apps for each institution they bank with. 

The account services available will include deposits and withdrawals, transfers, balance inquiries, loans, wealth management, and financial instruments. 

During the pilot-run period, the government will conduct a comprehensive assessment of the system and make adjustments if necessary before opening the system to fintech companies on 18 December 2019. 

Fintech companies looking to participate in the open banking system will be subject to a security check by the Financial Security Institute. 

Moreover, in 2020, the government will review an expansion of the Open Banking system to non-bank financial institutions, including mutual finance companies, savings banks and the postal service.