Technology innovations in the finance industry made in the recent years have led to a cashless and wallet-less society. Finance technology, also shortened as fintech, changed the finance practices of youth as the advent of digital wallets and simplified payment apps reduced the usage of cash.
Innovations of fintech aims to compete with the traditional financial methods such as directly visiting the bank for banking services. Today, due to the technological process with smart phones becoming a necessity, people began to favor online banking and abandoned the old way.
In Korea, several banks and fintech firms have opened including Samsung Pay and Kakao Corp. that took a step forward from cards by implementing a banking system that facilitates banking services through a single mobile app. Kakao Corp. currently runs KakaoBank, which is an internet-only bank. They are currently Korea’s number one peer-to-peer (P2P) money transfer service.
According to Financial Supervisory Service (FSS)’s 2018 statistics throughout January to May, 58.1 percent of users using mobile post-pay systems like P2P services were in their 20s.
“I prefer to use cards rather than cash because it has less financial damage when you lose it,” said Sung Min-gyeong, a student from College of Social Sciences. “In fact, even carrying a physical card is rare lately, because mobile pay systems like Samsung Pay and Kakao Pay are more convenient.”
Growth of fintech in the country led to the establishment of the Korean FinTech Industry Association (KORFIN) in 2016 which was created to join local fintech firms in order to work together and improve the industry.
“Currently, we have a total of 320 firms registered with us in which 270 are fintech firms. Other than that, we also have banks, stock firms, insurance companies, and even pre-existing finance firms like Naver, LGCNS, SK, and internet and IT firms,” said Lee Geun-joo, the director of KORFIN. “Fintech firms are very diverse where depending on the business; it could go under P2P services, insurance technology (insurtech), robo-advisor, crowdfunding, etc.”
According to Lee, the fintech startups in the association work to innovate and change finance systems through numerous technologies including artificial intelligence (AI), big data, and block chain. The association regularly organizes seminars, forums, and events such as KORFIN X Dongguk University Fintech Blockchain seminar.
“Fintech innovations are endless. For instance, unicorn companies were introduced to the sector recently,” Lee said. “A great example would be the mobile transfer app, Toss run by Viva Republica, where they provide numerous fintech services. Other firms like PeopleFund, and Rainist are also considered unicorn companies where they provide finance services in a cheap and convenient way.”
Furthermore, Financial Services Commission (FSC) and Financial Supervisory Service (FSS) held the first Korea Fintech Week 2019 at Dongdaemun Design Plaza on May 23 to 25. Throughout the three days, the event focus on current trends of the industry globally and introduced employment support programs. 60 local and international fintech companies, financial companies, and foreign institutions joined.
Lee ended on how the future of fintech industry is bright as they keep advancing, also widening the job scope.
“Through finance innovation, we hope to introduce a worthy finance service to the citizens,” Lee added. “Now, regardless of your income, everyone will be allowed to find cheap and easier ways to access finance services. Fintech is going to become the favored tactic in people’s financial habits.”