The local financial market is about to see a big bang in commercial banking thanks to the emergence of fintech, which refers to the convergence of finance and technology.

Like major developed countries, information technology-based financial services are still unfamiliar to most Korean consumers as the infrastructure has yet to be established in the country.

However, when market share competition starts, the speed of innovative financial products’ penetration into ordinary consumers’ daily lives may go beyond expectations. As South Korea is among the top few IT powerhouses, the outlook is quite bright in terms of upgrading the financial sector, whose global competitiveness is generally seen to lag far behind the country’s GDP ranking.

Earlier this week, the Financial Services Commission held the first meeting of a council on fostering fintech services, which comprised government officials, bank executives and CEOs from several industrial segments.

We are pinning hopes that policymakers and other participants will map out futuristic schemes to effectively commercialize the epoch-making service during their coming series of gatherings.

Close benchmarking of the developed countries would be necessary in the initial stage. However, they should keep in mind that the fintech market could bring a complete shift of power among global investment banks and other financial services firms in the coming years, according to future prowess.

In a bid to gain the upper hand, each businesses’ strategies should not simply seek higher market share in the domestic market. The government should pave the way for service providers to sufficiently concentrate on IT-integrated research activities.

Local banks have not been vigorous in developing innovative asset management skills, while engaged in overheated loan issuance competition in the saturated domestic market. As a result, many of their overseas operations are suffering from low profitability. And, except for Southeast Asia, their brand recognition among overseas consumers is very low.

The US and UK are seen as leaders in fintech, with Hong Kong fast emerging as a regional center. The playground for fintech is vast, ranging from mobile payments, automated investing and peer-to-peer lending to blockchain, a software ledger system that records all financial transactions executed for a particular asset.

For the traditional commercial banks, warning bells are ringing. Those who bungle this tech transition may go down in history. Former Barclays chief executive Antony Jenkins has predicted that hundreds of bank branches will face closures, alongside massive payroll cuts.

To face up to the challenge, Goldman Sachs and some other early movers have started to offer more technology-based services, while seeking partnerships or investments in the start-ups that are driving the change.

Some might regard fintech as a simple development of financial services like the Internet or mobile banking. The difference from the past cases lies in the fact that IT-based nonfinancial companies -- not commercial banks -- might take the initiative in developing the banking industry.

This means the sector will be no longer be the untouchable territory of the banks such as Woori, KB Kookmin, KEB Hana and Shinhan.

There is no time for Korean players to take a wait-and-see attitude. The big four have the obligation to contribute to the advancement of fintech in close partnership with nonfinancial firms, including IT-oriented start-ups.

Still, both global investment banks like Goldman Sachs and Korean players start from a more equal position than usual, and the latter might gain an upper hand in fintech.

In making the most of this golden opportunity, the roles of financial regulators and legislators are very significant. As there are many unnecessary regulations like strict entry barriers, the financial authority should carry out deregulation movement actively in consultation with the National Assembly.