While financial services companies exploring fintech systems were previously concentrated on payment settlement, they are now setting out in new fields, expanding their offerings to financial software or data analysis services. (Image : Pixabay)
SEOUL, April 5 (Korea Bizwire) – While financial services companies exploring fintech systems were previously concentrated on payment settlement, they are now setting out in new fields, expanding their offerings to financial software or data analysis services.
According to “The Rise of Fintech and Changes in the Financial Industry”, a report issued by the Hyundai Research Institute (HRI), global investment in fintech companies rose from $930 million in 2008 to $30 billion in 2013. The increase is rather dramatic, growing at an average of 26.1 percent annually.
The number of financial startup companies with a value of more than $1 billion also increased greatly from two in January 2014 to 16 in February 2016.
As the fintech industry is growing, it is expanding to various fields beyond simple payment settlement functions.
The report explains that there are already many fintech startups that offer almost every financial service provided by bank websites. They expect that fintech will dismantle financial services by function, providing innovative services, and one day replace the traditional financial services companies.
In the meantime, the rise of fintech will lower regulatory barriers in the financial industry.
Before, new financial businesses were only permitted under the ownership of a few companies that met strict criteria. As such, financial companies have secured a natural monopoly position through the networks they developed earlier.
However, the report explains that the growth of fintech is tearing down the walls of the establishment financial institutions, thanks to the spread of IT. As the characteristics of finance have changed, the gap between financial and non-financial sectors and transfers between countries is shrinking.
The Korean market had great potential for fintech to bloom, but got off to a slow start due to excessive government restrictions. However, after the government announced policy changes to support the industry, new businesses appeared, helping the Korean fintech industry to its early stages of development.
The report points out that innovative measures should be taken in order to set fintech on the right path. “The government should implement laws and policies regarding security, which is the core to the expansion of fintech. Also, businesses should look at the big picture, thinking about what consumers need and want in the long run. Various non-monetary means of payment that can be used by people of all ages should be developed.”
By Francine Jung (francine.jung@kobizmedia.co.kr)
