Financial Services Commission (FSC) Chairman Shin Je-yoon, center, talks with Lee Sir-goo, left, co-CEO of Daum Kakao during a meeting with officials of IT firms in Kakao's headquarters in Pangyo, Gyeonggi Province, Monday. / Courtesy of FSC



By Chung Ah-young



Financial Services Commission (FSC) Chairman Shin Je-yoon said Monday that the watchdog will give more leeway to financial firms to choose their own authentication systems for conducting e-commerce transactions.



At a meeting at Kakao's headquarters in Pangyo Techno Valley in Bundang, Gyeonggi Province, he also told IT company representatives that the commission would phase out outdated authentication systems requiring public key certificates or Active-X tools.



In Korea, certain electronics transactions ― such as online banking transactions or purchases worth 300,000 won or more ― involve the use of public keys to produce digital signatures. Those requirements have resulted in a Microsoft monoculture for operating systems and Web browsers. They also have been blamed for locking Koreans into outdated technologies, inconveniencing customers and creating significant security risks.



"We will also lift regulations that have hampered the competitiveness of Korean payment gateway companies," he said. "We will change the rules, keeping only the basic principles and measures to protect customers instead of regulating the details of financial technological security measures."



Representatives from Daum Kakao, LG Uplus, Samsung Electronics, Korea Cyber Payment and Korea Smart Card attended the meeting to discuss the development of the IT and finance sectors.



"The fusion of the IT and financial sectors is a global trend," Shin said. "So we will drastically improve the current system to offer new financial services."



The chairman called on the IT sector to create a new market by fusing with the financial sector. But he stressed that efforts to increase convenience with IT-based financial services should not violate consumers' right to privacy and information security.



The regulator and the IT company representatives agreed to launch a task force, with representation from both the government and private sectors, to look at the fusion of finance with IT. The task force will examine market needs as well as the industry's concerns.



The FSC has already begun taking steps to improve outdated systems and address concerns about convenience in e-commerce transactions.



In May, the regulator lifted the requirement for public key certificates for online payments using credit or debit cards involving amounts less than 300,000 won.



As a follow-up measure, it announced a measure in July to simplify online payment services by introducing an alternative authentication system in cooperation with the Ministry of Science, ICT and Future Planning.