South Korea formally introduced open banking services in a bid to support innovation and improve consumer convenience.

The new system was introduced by the domestic regulator Financial Services Commission (FSC) following a pilot phase.

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South Korea open banking will enable consumers to access basic banking services through any banking app of their choice.

Currently, the initiative includes 16 banks and 31 fintech businesses, with more institutions expected to join later.

The regulator said that over three million people registered through open banking since the launch of the pilot on 30 October 2019. During the same period, over seven million accounts were created.

A total of 10 banks participated in the pilot that ended on 17 December.

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FSC chairman Eun Sung-soo said that the open banking service will include account checking function and wire transfers.

He added that plans are on to expand the scope and function of the initiative. The government will also amend the Electronic Financial Transactions Act to provide a legal framework for the open banking initiative.

The open access is expected to reduce transaction fees for customers.

For large service providers, transaction fees will drop from the existing KRW400-KRW500 ($0.3-$0.4) figure to nearly KRW40-KRW50.

The figure will decrease further to KRW20-KRW30 for small- and mid-sized providers, Xinhua reported citing FSC.

The open banking initiative is said to benefit the customers as they can manage all accounts through a single application.