South Korea Agrees To Lower Banking Barriers For The First Time In 30 Years

South Korea has launched a major expansion of its banking sector, currently dominated by just five lenders.

The country’s Financial Services Commission (FSC) announced Wednesday (July 5) that it will permit more online banks, allow regional banks to expand their operations, and — for the first time in 30 years — greenlight the establishment of a new nationwide bank.

“Due to the oligopolistic nature of the banking industry, there has been a widely-held view among the public that banks are reluctant to make changes despite their easy profitmaking structure,” the FSC said in a news release.

“Therefore, the main purpose of the reform measures prepared by the taskforce is to promote fair and effective competition in the banking sector — but more importantly, competition driven by market forces.”

Read more: KFTC To Decide South Korea Mirae Asset Fines Over Intra-Unit Trading

The FSC says it also wants to help FinTechs and nonbank financial institutions compete with banks, and plans to “promote savings banks’ M&A activities to bolster their competitiveness and to boost competition in the deposit and loan markets.”

This is happening at a time when, as covered here last month, banks and FinTechs are increasingly depending on each other for data sharing and compliance to help meet the needs of digitally native consumers.