The nation‘s top financial regulator on Thursday vowed policy efforts to forge an integrated online platform for conventional players to accelerate digital transformation of their financial services in face of rising big tech companies. 

“The growth of contactless banking transactions, the so-called ‘unbundling’ as well as ‘rebundling’ trend, and the entry of tech giants into financial services have added fuel to market competition. It is time to review all means possible to beef up local banks’ future growth engines and competitiveness,” said the Financial Services Commission Chairman Koh Seung-beom during a meeting with the heads of the nation’s five major banks. 

Unbundling is a phenomenon whereby financial technology companies outpace local banks in terms of financial digital services like payment solutions. Rebundling refers to consumers‘ preference for integrated mobile platforms providing a wide range of financial services.

“By easing regulations for new forms of financial services and business models, while supporting massive investments in digital areas, (the FSC) plans to help local banks to become leading digital platforms providing various financial services, including banking, insurance and securities,” the chairman said.

Koh’s remarks came amid rising calls for a level playing field for conventional financial companies and their big tech rivals to ensure fair competition. 

The FSC chief also pledged to come up with measures to speed up their expansion into new business areas, including wealth management and investment consulting, to boost local banks’ growth momentum.

“In order for banks to serve as ‘comprehensive property manager,’ the regulator will improve the current regulations on trust business and allow them to expand the scope of their investment advisory businesses, which are currently limited to the real estate sector,” he said. 

Under the nation’s trust business law, assets like money and real estate can only be entrusted to banks. Debts or security rights are not allowed for banks’ trust businesses. Meanwhile, major lenders have kicked off their investment consulting services focused on real estate, in 2015 after gaining approval from the FSC. 

By Choi Jae-hee (cjh@heraldcorp.com)