“Open Amazon” to follow “Open Banking” in Korea?
We have long argued that Open Banking regulation creates an uneven playing field that has been left surprisingly unexploited by other financial services players (see “Are Insurers missing the Open Banking Opportunity?”).
In fact, looking at Open Banking regulation around the world, Australia stands out with its “Consumer Data Right” regulation that will extend beyond banking to include insurance, telecoms, power companies, etc.
Over the past three months, the Financial Services Commission (FSC) in Korea has conducted five “Digital Finance” consultative meetings, discussing ways to improve rules and regulations for an ‘upward leveling’ of financial regulations for financial institutions, FinTechs and big techs alike, to promote competition and innovation for all.
A total of forty out of sixty-two suggestions (65%) have been accepted on the issue of regulatory arbitrage and digital transition, with fifteen others pending for mid- to long-term review.
The key suggestion under “regulatory arbitrage”, impacting the broader e-commerce industry, reads as follows:
Make data provision for MyData more equitable for banks and electronic financial businesses (e-commerce businesses) by having e-commerce entities open up order history information.
We believe this is an industry first. It is also not clear how they would go about the implementation, given that the e-commerce business would not fall under the FSC scope, so cabinet-level discussions seem necessary. If you have heard about similar moves by regulators in other jurisdictions, please share that information in the comments.
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