The Financial Services Commission said Thursday it will innovate the current personal identification system in a way that consumers can enjoy diverse authentication services other than face-to-face method when using financial services.

“Most of the current ID verification measures in the financial sector are based on face-to-face system, which given rise to the need to diversify verification services,” Financial Services Commission Chairman Eun Sung-soo told the reporters during a press breifing on the new financial policy direction for the second half of 2020. 

“In response to technological advances and a growing demand for fast and convenient access to financial transactions, (the FSC) will come up with a series of measures to improve the ID verification system in the finance industry within the third quarter.”

The FSC’s move is part of the financial regulator’s efforts to vary personal authentication services in the local financial market as the coronavirus outbreak has provoked a growing demand for contactless recognition for financial services. Earlier this week, the FSC held the first task force meeting to build a new regulatory framework for various personal authentication services including biometric identification as well as the use of simple passwords. 

Under the Act on Real Name Financial Transactions and Confidentiality, local financial companies have faced strict restrictions in terms of providing contactless name authentication services to their consumers when carrying out financial transactions or opening a bank account.

Eun also raised the importance of financial security along with innovative ID recognition services.

“Digital transformation in finance sector should proceed in line with continued efforts to protect financial security. By establishing internal control system within the local financial companies in order to prevent the leak of personal information, the financial authorities will spur risk management in digital finance sector,” he said. 

In addition, Eun said the FSC is preparing for recollecting loans, citing concerns over fiscal soundness.

“The coronavirus outbreak will reach an end, so we urge local lenders and related financial institutions to continually prepare for the moment, when they have to repossess assets they lent to consumers for protecting their financial soundness,” he said. 

Meanwhile, by increasing deposit as well as liquidity coverage ratio, which determines financial companies’ lending capacity, the financial authorities have been supporting financial companies here to actively lend to households and companies hit hard by the coronavirus fallout.

By Choi Jae-hee (cjh@heraldcorp.com)