Lee Eog-won: "We Will Break Down Regulatory Walls That Hinder Innovation"... Financial Sandbox Reforms

The Financial Services Commission (FSC) is set to significantly overhaul its financial regulatory sandbox system to facilitate the integration of innovative financial services into the mainstream financial sector.

The FSC announced on June 21 that Chairman Lee Eog-won held a meeting on sandbox system improvements and an event titled "Financial Great Transformation: Changing the Fintech Landscape Beyond Regulations" at the Sogang University Pangyo Digital Innovation Campus in Seongnam, Gyeonggi Province, on June 19.

Chairman Lee stated, "The financial regulatory sandbox system has increased the dynamism of the financial ecosystem and created numerous business opportunities and jobs for young people."

As of the end of March, the system has attracted a cumulative total of 6.23 trillion won in investments and created 4,794 jobs.

However, he acknowledged that "there were institutional limitations in supporting innovative companies to successfully settle into the mainstream financial sector," and promised, "We will boldly lower the barriers to entry for the sandbox and provide support so that the efforts of innovative businesses do not end at the testing stage but successfully transition into the formal financial system."

To support the early growth of fintech companies, the FSC has decided to grant exclusive operating rights starting from the moment they are designated for the sandbox.

Small and medium-sized innovative businesses granted these exclusive rights will be exempt from review procedures related to cost support and will see an increase in their funding limits.

Previously, such exclusive operating rights were only recognized once a company received official authorization during the institutionalization stage.

The commission has also prepared supplementary review measures and guidelines to provide flexibility in additional conditions, ensuring that startups do not struggle with issues such as a lack of financial soundness.

The post-management system will also be improved.

The operational performance of innovative financial services will be reviewed on an annual basis starting immediately after their launch, and relevant laws will be promptly revised to facilitate the commercialization of excellent services.

Guidelines will also be established to reduce operational uncertainties faced by innovative businesses.

High-performing innovative businesses will be provided with incentives, such as bonus points in licensing reviews or access to a fast-track approval process, to ensure they can continue their services as formal financial operators even after the sandbox period ends.

Furthermore, the scope of the system will be expanded to include the "Internet Primary Bank Act" to ensure the sandbox system can respond flexibly to changes in the financial environment.

Chairman Lee emphasized, "A true financial transformation is completed when we fill the blind spots of finance—which existing financial institutions have ignored due to profitability or conservative risk management—with technology and a spirit of challenge," adding, "We will break down the regulatory walls that hold back innovation."

(Photo: Provided by the Financial Services Commission, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.