Celebrating 130 years of diplomatic relations, French and Korean institutions jointly held a seminar last week to explore ways of cultivating the financial technology industry, known as fintech.
Part of “La French Tech” initiative -- a French national program to nurture start-ups worldwide -- the event at InterContinental Seoul Coex on May 30 was hosted by the Korean Fintech Center and the French Embassy.
It drew some 250 participants, including financial regulators, businesspeople and experts from both countries, who discussed potential opportunities and regulatory issues.
Mentioning Korean President Park Geun-hye’s state visit to France on June 1 for the 130th anniversary of diplomatic ties, French Ambassador Fabien Penone noted in a speech that the two countries adopted a “Strategic Partnership for the 21st century,” targeting collaboration in high-tech, high value-added industries during Hollande’s visit to Korea in November 2015.
(From left) Yim Jong-yong, chairman of the Financial Services Commission, French Ambassador Fabien Penone and Jung Yoo-shin, chairman of the Korean Fintech Center and professor at Sogang University, pose at a seminar on financial technology at the InterContinental Seoul Coex on May 30. (Financial Services Commission)
French Ambassador Fabien Penone (left) and Jung Yoo-shin, chairman of the Korean Fintech Center and professor at Sogang University (Financial Services Commission)
“In fintech, French firms are very well established in Korea, with financial investment accounting for half of total investments here,” Penone highlighted. “French companies in the field of payment security have partnerships with major Korean major counterparts, and French IT firms have developed payment applications for Korean enterprises, some of them represented today.”
At the event, participating companies included fintech champions such as Banque de France, Oberthur, Thales and Kakao, as well as financial groups BNP Paribas, AXA, Shinhan Bank and Hana Bank.
A memorandum of understanding was signed between the French Tech Hub Seoul and the Korean Fintech Center for the joint promotion of fintech start-ups, while another memorandum was inked between France’s Gemalto and Korea’s AT Solutions for the joint development and marketing of a secure payment system using the smartphone.
Last year, the Korean government granted its first Internet-only banking licenses to Daum-Kakao and KT, and Samsung Pay launched a mobile payment application to be available worldwide.
“If this new ecosystem guarantees better protection of consumers, it will also create new economic models,” the ambassador added.
Yim Jong-yong, chairman of the Financial Services Commission (Financial Services Commission)
A seminar at InterContinental Seoul Coex on May 30 hosted by the Korean Fintech Center and the French Embassy. (Financial Services Commission)
Yim Jong-yong, chairman of the Financial Services Commission, underlined in a speech that the “La French Tech” initiative has similarities with Korea’s “creative economy” drive, with a shared focus on supporting start-ups and innovation.
In March in Seoul, the French Tech Hub -- a start-up incubator targeting partnerships with small and medium-sized Korean enterprises in high-tech industries -- was established. The platform brings together venture companies in information and communications technology, financial technology and electronic commerce, as well as medical tech, biotech and clean tech sectors.
“Korea has world-class expertise in information technology, including semiconductors, smartphones and Internet. We also have some of the best financial infrastructures in Internet banking and credit payment,” Yim said. “Since January last year, the Korean government has put its weight behind supporting the fintech sector by improving policies and creating ecosystems.”
Citing advances in electronic payment transfer, the chairman said various creative ideas are being materialized and online banks will soon open. Key areas of policy support are robo-advisers, big data and global expansion, according to Yim.
In an interview with The Korea Herald, Alexandre Stervinou, head of the noncash means of payment oversight division at the Banque de France, who participated in the seminar, said, “Fintech being the buzzword around the world, France has opened up its banking sector to new entrants for increased competition and innovation since the mid-2000.”
In line with the European Commission guidelines, French regulators introduced the first payment services directive in 2007 that enabled alternative institutions to provide banking services, according to him. The second payment services directive, effective until 2019, was put in place in January.
Alexandre Stervinou, head of the noncash means of payment oversight division at the Banque de France (Joel Lee / The Korea Herald)
“Opening up the market allowed greater competition and innovation, but it happened with consumer protection in mind at the same time. These are two main issues,” he said. “People should have confidence and trust in the payment system they use. Laws can create a framework for enhanced security in online transactions, data privacy and consumer information.”
Noting that fintech also encompasses medical, the “Internet of Things,” insurance and other areas, Stervinou said Korea can adapt its regulatory regime in the course of its financial evolution.
France-Korea economic relations have continuously expanded, with $8 billion in bilateral trade last year -- a 50 percent increase over the past 10 years. Making use of the EU-Korea free trade agreement that came into effect since 2011, France is the second-largest European exporter to Korea.
French financial companies have spearheaded the country’s business presence in Korea, with multinational corporations such as BNP Paribas and AXA operating branches since the 1970s.
According to the embassy, French firms have set up various joint ventures, most notably Shinhan-BNP Paribas, Kyobo-AXA and NH-Amundi. French fintech firms have also been at the forefront of security solutions around the world, having developed Internet-only banking more than 10 years ago.
“As a major European economy driving the continental integration, France has to carry on its work as it has, shaping the regulatory framework, labor laws and economic policies,” Stervinou said. “The Central Bank is trying to increase exposure of Paris as a financial center, much like London and Frankfurt.”
By Joel Lee (email@example.com