Korea’s Financial Sandbox
Adaptive regulation in action
Explore South Korea’s Financial Regulatory Sandbox, a dynamic, multi-ministerial framework that has processed over 2,200 applications to accelerate fintech innovation and drive policy experimentation. By informing key legal reforms, the sandbox has enhanced regulatory adaptability, promoted financial inclusion, and fueled market growth across the nation’s financial sector.
Geographic scope: National (Korea)
Topic/sector: Finance
Sandbox type: Regulatory
Year started: 2019
Sandbox status: In operation
№ of applications so far: 2211
Duration of the sandbox: The testing period for each approved project typically lasts 3–6 months, but under the Special Act on Financial Innovation Support it can be extended up to two years depending on evaluation outcomes.
Who is behind this sandbox: Financial Services Commission (FSC), Fintech Center Korea (FCK)
Website: Financial Regulatory Sandbox
Overview of the Financial Regulatory Sandbox
Established in 2019 under Korea’s Special Act on Financial Innovation Support, the Financial Regulatory Sandbox allows fintech companies to pilot innovative financial services under temporary regulatory exemptions, fostering innovation and providing real-world data for informed regulatory reform.
Why FSC Created the Sandbox
Korea’s rapid financial digitalization exposed regulatory barriers that slowed the launch of innovative fintech services, as existing laws struggled to keep pace with new technologies and business models. To overcome this, the Financial Services Commission, in partnership with the Fintech Center Korea, created the sandbox, granting temporary regulatory exemptions for controlled pilots. This approach enables real-time testing, fosters innovation, and informs long-term regulatory reform while ensuring consumer protection and managing systemic risks.
How the sandbox works
Korea’s Financial Regulatory Sandbox offers innovators a clear, step-by-step path from idea to impact. Proposals are submitted via the Korea Chamber of Commerce and Industry (KCCI) platform, reviewed for feasibility, and, if approved, granted temporary regulatory exemptions by the Regulatory Special Review Committee. Successful applicants test their solutions in real-world conditions under close oversight, receiving guidance throughout. Each project concludes with a formal review that can lead to policy updates, service certification, or market launch.
Challenges addressed
The sandbox was established to overcome critical barriers within Korea’s financial sector, including:
- Rigid Regulatory Environment: The sandbox provides a flexible testing space to navigate and adapt to existing regulatory constraints.
- Innovation Delays: It reduces the time innovators wait for regulatory approvals and reforms.
- Lack of Data-Driven Policies: It produces evidence from sandbox experiments to guide informed regulatory updates.
Results & insights
The sandbox has been instrumental in enabling groundbreaking service innovations within South Korea’s financial sector. A prime example is Finda, a fintech company that developed an AI-powered loan comparison platform. Supported by the sandbox’s regulatory exemptions, Finda refined its service, a mobile app that lets consumers easily compare loan products across multiple institutions, leading to significant growth and a $37 million Series C funding round in 2023.
Download the full case study
Interested in learning more about Financial Regulatory Sandbox sandbox and its impact? Download the complete case study for more including success stories, impact, evaluation, and practical insights for sandboxers.
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