Capacity Diagnosis and Development Strategy of a Fintech Hub in SeoulSubmitted by siadmin on Thu, 01/11/2024 - 10:00
Fintech is a combination of finance and technology, and refers to technologies, companies, and industries related to the provision of financial services. Fintech has grown rapidly since the mid-2010s along with the trend of digital transformation in the financial industry, and it was expected that the growth of the fintech industry would lead to the rise of fintech hubs that differentiate from traditional financial centres. Subsequent trends have shown that while new fintech hubs are emerging, fintech tends to strengthen the existing financial centres. Notably, the existence of information and communication technology clusters, the development of start-up ecosystems, and the improvement of the financial regulatory environment have been pointed out as the main conditions for the establishment of fintech hubs.
Seoul's ranking as a financial centre has been declining since the mid-2010s, but rebounded around 2019 and is now almost back to its mid-2010s position. While Seoul is recognised for its competitiveness in digital finance and fintech, the city's ranking as a fintech hub is actually below that of a financial centre. This is due to the traditionally highly regulated nature of the Korean financial industry, which limits the growth potential of the fintech start-up ecosystem.
In Seoul, fintech is based majorly on the growth of the telecommunications, finance, and insurance industries, and is one of the most concentrated industries related to the Fourth Industrial Revolution. Overall, Seoul’s fintech industry shares industry size, structure, and start-up trends with the finance and insurance industries. Its cluster overlaps heavily with the finance and insurance clusters in Seoul's three major urban centres, and is concentrated in Yeouido, Gangnam, and Guro-Gasan rather than the historic centre.