South Korea says it has commenced preliminary services for its new Open Banking system, under which a bank customer may use virtually all banking services of any other bank in South Korea with just one application.
The new system allows bank customers to use any mobile application of their choosing to access their bank accounts at any local bank and also to withdraw or transfer their savings from any bank account. For instance, someone could use the application of one local bank to access an account at a different bank and send money to or from any other account held.
Currently, 10 local lenders are taking part in the preliminary service, but the other eight banks, including internet-only banks, are expected to join the new banking system soon, the top financial watchdog, the Financial Services Commission (FSC), announced.
The FCS says the Open Banking system will be fully launched by end Q4 2019 when the banks completely open their payment system to FinTech firms as well, further enhancing convenience and lowering the cost of financial transactions for their customers.
The FSC says open access to the payment system, along with the banks’ joint access to accounts, will significantly lower transaction costs to only about 10% of the current costs.
The financial regulator has said it may also consider further expanding the service to include smaller retail lenders from next year.