As the Korea Herald reported on July 16, Kakao Pay, the financial technology arm of mobile giant Kakao, is likely to push back its initial public offering schedule as South Korea’s financial authority asked the company to make some corrections to its prospectus.

The market consensus is that these corrections include lowering their IPO price, which — as we previously reported — would lead to a valuation of around, and likely above USD 10bn.

As I am trying to wrap my mind around this valuation, I must admit that I am certainly among those that believe that bubbles have been…

According to the Nikkei, the Financial Action Task Force (FATF) will release the results of their “Fourth Round of Joint FATF/APG Mutual Evaluations of Japan” in August, and judging by the reported mobilization of combined Financial Services Agency (FSA) and Bank of Japan (BOJ) forces, the results are not going to be pretty. This is despite a concerted effort, also led by the regulators, to raise the AML and CTF standards across the industry prior to the inspection.

For background on the overall history of Japan’s compliance challenges, we refer back to our article published in 2019 on the topic.

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On June 11, the Payment and Settlement Bureau of the Bank of Japan held the “Future of Payments Forum Digital Currency Subcommittee: Technologies supporting central bank digital currencies” in an online format.

In the subcommittee, with the central bank digital currency(CBDC) in mind to serve as a payment platform in the digital society, the following topics were discussed:

• Security required for CBDC,
• Universal access required for CBDC, and
• Standardization of information technology related to digital currencies

Each of them introduced the latest technologies and initiatives that can be utilized by CBDC from the practical point of contact with companies, etc…

JAL NEOBANK, a banking service for Japan Airlines Mileage Bank members, last week launched mortgage and card loan products, the first new products since the app-only banking service was launched at the end of April. JAL NEOBANK operates on the Sumishin SBI Net Bank platform (a 50/50 joint venture between Sumitomo Mitsui Trust Bank and SBI Holdings), with JAL Payment Port as the banking agent.

As illustrated by the graphic above, JAL NEOBANK started with deposit (yen deposit, foreign currency deposit, etc.) and payment functionality (ATM deposit / withdrawal, bank transfer, etc.). …

The Korea Financial Services Commission (FSC) held a consultative body meeting on digital finance on July 8, 2021, and introduced a guideline on the use of artificial intelligence in financial services to bolster public trust in AI-based financial services and continue to promote innovation in financial industry.

All financial and finance-related institutions offering financial transactions and other customer oriented services using AI technologies should follow the guideline which sets forth the least necessary level of standards for AI.

The authorities plan to begin applying the guideline within this year after a sufficient time for preparatory work. Based on this guideline…

Big news this week with Goldman Sachs obtaining a banking license in Japan to support their global Transaction Banking business. Not a surprise, really, since they started the application process in 2019. So even for a well-resourced and long-established organization like GS, it is not an overnight endeavor to be licensed.

What struck me the most, though, was this eerie feeling of deja-vu. Did we not have a banking license in Japan before? What happened to it? I thought that by the time I joined GS in Tokyo in 2000, the banking entity was at least dormant, and maybe the…

The Korea Financial Services Commission (FSC) introduced new rules to further detail the anti-money laundering (AML) requirements on virtual assets under the revised Act on Reporting and Using Specified Financial Transaction Information, which went into effect on March 25, 2021.

Scope

The Act defines “Virtual Asset Service Providers (VASPs)” as business entities which engage in one or more of the following activities or operations:

• purchase and sales of virtual assets;
• exchanges between virtual assets;
• transfer of virtual assets;
• safekeeping and administration of virtual assets;
• intermediation or brokerages of virtual asset transactions; exchange of virtual assets; and
• other activities specified by the…

The Korean government has approved revisions to the Insurance Business Act, opening to the path to introduce a small-sum, short-term specialized insurance (SSI) business with a variety of insurance coverage such as pet, leisure and travel insurance, effective from June 9, 2021.

Korea is thus following Japan in creating an SSI regime. We have previously covered Japan’s Small Insurance License in detail. Alas, while Japan’s capital requirements are quite modest, with capital at a mere JPY 10 million (USD 90,000), Korea will require a minimum capital of KRW 2 billion (USD 1.8 million).

SSI licensees are allowed to provide insurance…