Online banking services
FinTechs belonging to this area offer traditional banking services in a modern way, usually through online services or mobile applications as well as ancillary services – e.g. enabling customers to manage their giro- or custody-accounts online and in real time or offering e-wallet services. Keywords in this context are also API-Banking or Banking as a Service (BaaS)/ Bank as a Platform (BaaP).


API stands for application programming interface and is offered to access data banks and to extract and insert information. API-Banking consequently means the access to data banks of banks to offer new and innovative banking applications.

Through these services FinTechs offer services with new functions, e.g. enabling customers to manage their accounts online and in real time.

BaaS – Bank as a Service/BaaP – Bank as a Platform:
The API-based Bank as a Service platform has a full banking licence, but merely serves as the back end for standalone independent FinTechs, which “use” the licence and the back end of the bank to offer new financial services, launch additional financial products or expand into additional markets.


Attitude of the country towards online-banking services

In addition to internet banking and mobile banking, contactless services, such as opening bank accounts without visiting the bank in-person, are increasing. Further, open banking systems are recently being implemented, which enable users to look up multiple bank accounts and make payments and transfers using a single application. It is expected that open banking systems will enable FinTech companies to actively enter the financial market, and banks would be able to provide a variety of services, including asset management services for customers and selling financial instruments. 

In addition, the operation of online-only banks is accelerating the digital transformation of banking services, and Toss Bank has recently been authorized as the country's third online-only bank.

Legal affairs

Obligations and requirements to provide online-banking services described above

Open banking systems are currently operated by agreements between institutions, and according to the comprehensive digital finance innovation plan regarding amendments to the EFTA, etc., it will lay out the legal landscape for open banking systems, and the amended EFTA currently proposed to the National Assembly includes such provision. 

In addition, according to the Act on Special Cases Concerning Online-Only Banks, it is necessary to obtain an authorization to operate an online-only banking business, and if such banking business is operated by means of electronic financial transactions only, only KRW 25 billion is needed as a capital.

Additional comments regarding the legal situation for online-banking services or what FinTech’s must be aware of in this business area

The amended EFTA proposed to the National Assembly is expected to introduce a comprehensive payment service provider system that grants the right to open accounts, which was only held by banks and other financial institutions in the past. As such, it is expected that electronic financial companies that provide a comprehensive payment service system would emerge.

Economic conditions

Market size for online-banking services and biggest companies in this business area

Currently, 18 banks, 62 FinTech companies and 15 securities firms are participating in the open banking system. It is expected that the amount of money being used in the open banking system will reach KRW 314.3 trillion in 2021, an increase of 175 per cent compared to the amount used in 2020, and the number of usage is also expe
cted to reach 6.43 billion, which is 153 per cent higher than last year. In addition, in 2021, open banking services expanded not only to banks but also to credit card companies and plans to expand open banking services to the insurance sector are also being contemplated. Although BaaS-related financial services in Korea are currently at an insignificant level, such service is also expected to be more prevalent following the implementation of MyData services, etc.

With respect to online-only banks, Toss Bank was approved as the country's third online-only bank in 2021, after K Bank and Kakao Bank. Further, after the implementation of the open banking system, Kakao Bank and KB Kookmin Bank were confirmed to have the largest number of users, based on the most-frequently used banking applications.

Additional comments regarding the economic situation for online-banking services or what FinTech’s must be aware of in this business area

It is expected that FinTech companies will be able to actively launch specialized services that incorporate innovative ideas in addition to expanding existing services as they are able to access other financial companies and reduce fees by utilizing open banking services. However, it seems necessary to develop and provide services for the convenience of customers that have not been provided in the past by existing fintech companies.



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