Outlook of the Fintech Industry in Korea – How startups in Korea are leading the Fintech industry
2020-12-17
The fintech industry in Korea is one of the fastest-growing fintech ecosystems in the world. One of the key advantages of South Korea is their highly engaged mobile consumers with a high propensity to adopt new technologies. The current coronavirus pandemic is leading to an increased need for digital banking services, P2P payment options, loan-financing, and other fintech solutions. Banks in Korea are looking to add AI and Blockchain technology to their existing financial services.
In addition, banks in Korea have been collaborating with fintech startups that can offer innovative tech-solutions. Furthermore, digital payment technology continues to evolve rapidly in Korea. These days most payments are done through mobile banking services. Lastly, the next generation of consumers is driving the adoption of alternative leading startups in Korea.
Many of the top innovative fintech companies in Korea are startups. This is because they have the agility to pivot their operations to provide specialized services to consumers quickly and efficiently. The fintech community in Korea is now stronger than ever and Seoul Fintech Lab has been actively supporting the fintech community for over 2 years now. The adoption of fintech by traditional financial institutions in Korea has also grown, as they understood the need to innovate and transform.
Fintech funding by the Korean government and the private sector has risen steadily to fuel this growth. Therefore, fintech startups in Korea are the future of financial technology in Korea. Let’s take a closer look at some of the fintech startups in Korea that are looking to revolutionize all aspects of the financial sector in Korea.
A key player in the Blockchain financial ecosystem in Korea is Lambda 256. The Blockchain startup solves various problems that blockchain platforms have, and conducts research and development of solutions necessary for popularizing blockchain. Last year, it released 'Luniverse', a service-type blockchain platform that can establish blockchain services safely and easily. The startup attracted an investment of 10 billion won ($9 million) worth of Series A from investors including Woori Technology Investment (the venture arm of Woori Bank).
Lambda 256 moved into Seoul FinTech Lab because of the rise in blockchain service trends towards finance.
Lambda 256 is planning to expand its services to the areas of loyalty points, Stablecoins, and Decentralized Finance (DIFI) in addition to DID and sidechain.
8Percent is a P2P lending platform that offers an 8% return for lenders and another option for borrowers in Korea who need cash quickly. Borrowers simply need to apply for the amount they need and 8Percent reviews their application on various factors such as the borrower’s credit score, use of capital, and other proprietary measures. Then an lender interest range of 5-15% is set (Average return is 10.1%). Therefore lenders can reduce the risk of losing their principal by safely diversifying their investment with 8Percent. Over $30 million in loans have been done through the platform.
Small Ticket offers an alternative to existing financial companies. They offer consumers customized lifestyle-based insurance products and services. These customized insurance coverages are not offered by the bigger established insurance companies. Users that join Small Ticket will have access to several insurance packages for travel, pets, and even hiking. In addition, members can form a community with people who have similar lifestyles. There is a small insurance fee, however, Small Ticket offers a reward system where users can get money back.
Korean consumers are now seeking ease of use and convenience in everything they do—from online shopping to banking services. However, sending money in and out of Korea has been an issue in Korea for many years. Overseas remittance service offered by Korean banks is costly, inefficient, and time-consuming due to structural problems. Koreans have to not only pay the bank in Korea but also the intermediary banks and overseas banks.
Moin offers a highly efficient cross-border money transfer service. They have obtained a small-sum overseas remittance license from the Ministry of Economy and Finance to allow remittances to over 30 countries. Companies outside of Korea can also send money to Korea using Moin. Overall, Moin’s commission fee is up to 90% lower than those of conventional banking services.
In addition, banks in Korea have been collaborating with fintech startups that can offer innovative tech-solutions. Furthermore, digital payment technology continues to evolve rapidly in Korea. These days most payments are done through mobile banking services. Lastly, the next generation of consumers is driving the adoption of alternative leading startups in Korea.
Many of the top innovative fintech companies in Korea are startups. This is because they have the agility to pivot their operations to provide specialized services to consumers quickly and efficiently. The fintech community in Korea is now stronger than ever and Seoul Fintech Lab has been actively supporting the fintech community for over 2 years now. The adoption of fintech by traditional financial institutions in Korea has also grown, as they understood the need to innovate and transform.
Fintech funding by the Korean government and the private sector has risen steadily to fuel this growth. Therefore, fintech startups in Korea are the future of financial technology in Korea. Let’s take a closer look at some of the fintech startups in Korea that are looking to revolutionize all aspects of the financial sector in Korea.
Startups Looking to Revolutionize the Fintech Industry in Korea
Blockchain Adoption Solution - Lambda 256 (Luniverse)
A key player in the Blockchain financial ecosystem in Korea is Lambda 256. The Blockchain startup solves various problems that blockchain platforms have, and conducts research and development of solutions necessary for popularizing blockchain. Last year, it released 'Luniverse', a service-type blockchain platform that can establish blockchain services safely and easily. The startup attracted an investment of 10 billion won ($9 million) worth of Series A from investors including Woori Technology Investment (the venture arm of Woori Bank).
Lambda 256 moved into Seoul FinTech Lab because of the rise in blockchain service trends towards finance.
“Blockchain services are gradually joining forces with existing finance and fintech. We believe that we can expand the ecosystem by interacting with Seoul FinTech Lab residents. We are looking for ways to become more competitive and advance into foreign markets through the support of Seoul FinTech Lab. We will be able to introduce various services such as blockchain finance developed in Korea overseas,” said a representative at Lambda 256.
Lambda 256 is planning to expand its services to the areas of loyalty points, Stablecoins, and Decentralized Finance (DIFI) in addition to DID and sidechain.
The Pioneer of P2P lending in Korea - 8Percent
8Percent is a P2P lending platform that offers an 8% return for lenders and another option for borrowers in Korea who need cash quickly. Borrowers simply need to apply for the amount they need and 8Percent reviews their application on various factors such as the borrower’s credit score, use of capital, and other proprietary measures. Then an lender interest range of 5-15% is set (Average return is 10.1%). Therefore lenders can reduce the risk of losing their principal by safely diversifying their investment with 8Percent. Over $30 million in loans have been done through the platform.
Customized Digital Insurance Services - Small Ticket
Small Ticket offers an alternative to existing financial companies. They offer consumers customized lifestyle-based insurance products and services. These customized insurance coverages are not offered by the bigger established insurance companies. Users that join Small Ticket will have access to several insurance packages for travel, pets, and even hiking. In addition, members can form a community with people who have similar lifestyles. There is a small insurance fee, however, Small Ticket offers a reward system where users can get money back.
Global Money Transfer Service - Moin
Korean consumers are now seeking ease of use and convenience in everything they do—from online shopping to banking services. However, sending money in and out of Korea has been an issue in Korea for many years. Overseas remittance service offered by Korean banks is costly, inefficient, and time-consuming due to structural problems. Koreans have to not only pay the bank in Korea but also the intermediary banks and overseas banks.
Moin offers a highly efficient cross-border money transfer service. They have obtained a small-sum overseas remittance license from the Ministry of Economy and Finance to allow remittances to over 30 countries. Companies outside of Korea can also send money to Korea using Moin. Overall, Moin’s commission fee is up to 90% lower than those of conventional banking services.