Fin2B Co., a South Korean fintech start-up, will soon launch a service to help liquidate accounts receivable for small and medium-sized enterprises (SME) at an affordable discount rate, according to sources on Monday. The service is available via online and mobile platforms. SMEs usually receive accounts receivable from transaction parties, mainly large companies, to secure future payment. But accounts receivable may be paid up to 90 days later, often leading to mismatch in the balance sheet for SMEs.

SMEs which immediately need cash sell their accounts receivable to banks with a discount rate of 3.5 percent on average. Fin2B can play a role in this situation, as it attracts investors who will buy accounts receivable from SMEs by lowering the discount rate to 2.5 percent, for example, helping SMEs ease their financing cost.

Not only institutional investors but also large corporations can participate as investors. The platform can generate a win-win situation as large companies can expect higher return on their investment, while SMEs can get funds at a lower cost.

According to the Bank of Korea’s Economic Statistics System (ECOS), accounts receivable held by SMEs total 175 trillion won ($149 billion), of which 35 trillion won are liquidated and traded at commercial banks. Fin2B expects the market size will reach 80 trillion won if companies outside the statistics are considered.

Fin2B is also working on providing credit loan services using big data occurring from transactions between large and small companies.

Fin2B CEO Park Sang-soon said he will make Fin2B a financial platform to help ease credit crunch for Korean SMEs.

[Reporter Ko Young-hoon of Korea Financial Times] "Fintech is about breaking down existing things and presenting new solutions through bold challenges," FIN2B CEO Park Sang-soon defined fintech as innovation in financial business models. CEO Park Sang-soon said that while finance has a strong character of being a license-based sanctuary, fintech challenges existing models and establishes new solutions, adding that he wants to change the existing practices once. He expressed his ambition to provide financing services to small and medium-sized Korean companies through FIN2B, a company he leads, by improving financial businesses beyond the limits of existing institutional finance. He also stressed that it is important to combine both finance and technology well in order for fintech to succeed.

To this end, CEO Park Sang-soon emphasized the need to innovate business models (BMI). He then proposed the theme of FinTech to create a market. It creates a place where SMEs and finance can work together to create synergy in FinTech, and between buyers and sellers, and between investors and SMEs. To this end, buyer and investment fund must be demonstrated, and business potential is realized by adjusting competitiveness in competitive bidding through Dynamic Discount, a dynamic discount rate determining model. He did not even give affectionate advice on the fintech ecosystem as a whole. He said Data & Analytics can be seen as the basis of all businesses, but it is not easy to make profits and financial management areas should be considered as well. He added that investment, loans and crowdfunding are areas where interest income can be generated, so it is a growing market, and while security and blockchain and cryptocurrency (virtual currency with increased security) are universal, it is not easy to create a profit model. He also added that the payment and settlement areas will be taken by large companies.

Currently, traditional financial banks have difficulty in cost competition, so it is difficult to withstand price competition. It is predicted that restructuring will take place and that 30-40% of the workforce will be included in the restructuring workforce within the next 10 years, and marginal businesses will be removed from the market. In the case of traditional financial businesses, the possibility of growth is low due to carnivalization (self-market erosion) or organizational culture issues, so the collaboration between the two can enhance competitiveness. Consulting companies can quickly access global trends and see in real time how the world is going, he said, adding, "We can read trends of which business groups are in the spotlight these days, and we can also expect learning effects on new market areas through consulting experiences with existing financial groups."

[Reporter Ko Young-hoon of Korea Financial Times] The Korea Financial Newspaper held the "2016 Korea Financial Future Forum" under the theme of "Asking the Korean Economy: Fintech and Corporate Restructuring in Crisis." On the day, FIN2B CEO Park Sang-soon gave a lecture on the current state of fintech in Korea and its future tasks. At the meeting, Park stressed that the essence of fintech lies in finance, not technology. Park is considered one of the leading experts in fintech who prepared Internet-only banks. After serving as the CEO of finance at the Seoul office of Boston Consulting Group (BCG), Park prepared for the establishment of an Internet-only bank (DBK Partners) and is currently the CEO of FIN2B, a fintech company that provides financial solutions to small and medium-sized enterprises.

CEO Park led the lecture by presenting topics such as △Fintech stagnation and development direction △A perspective on the fintech craze △Key trends in the global fintech industry △The current address and future tasks of the Korean fintech industry. He argued that fintech is an innovation in the business model of finance. He explained that technology is a key means of enabling innovation in the financial business model, and fintech is a technology proposal that has business potential through value proposals. Regarding the current fintech situation, he said, "The credibility of SME financial statements is low," adding, "Credit rating modeling can be largely used as evaluation factors for SMEs, credit ratings for SMEs, and data on business relationships with SMEs." He predicted that this could create a framework for raising funds. Companies in need of money come in by creating a marketplace and use short-term management funds for short-term management products of banks. Large companies suggested that short-term investments will be created rather than putting money into banks, and banks will also have a way to raise short-term funds. He said that finding business plans is FinTech, and analyzed that △security area △ data area △ payment area has increased worldwide. In addition, it said that the Bitcoin blockchain area and P2P loan area have begun to increase.

On the question of whether the fintech boom will continue, he said, "The cost for production has dramatically decreased, citing film production and distribution." He also pointed out that the business in this sector has entered an era of infinite competition and changed from film editing to file management. As it is not easy to differentiate products, more methodologies using non-face-to-face channels are expected to increase in the future. "When we look at the theater, we are reminded of the branch office of a bank," Park said. "If we drastically lower the cost of transactions and processes, we will personalize our marketing offerings and lead to customized financial business models." He also diagnosed that companies that do not meet the expectations will be eliminated. He also suggested a platform business on how to insert finance into the digital ecosystem and explained that it can provide contact points for new customers. He also said that organizations are conservative and have limitations in pursuing innovation at a time when traditional financial companies are also trying to do fintech.

Financial officials such as banks suggested that the open API would be a new business item for traditional financial institutions, citing Ali Pay as an example. In the Internet and digital domains, customers can form a significant intersection and have many business opportunities, citing aggregator platforms provided on one website as a good alternative to the fintech business. He said, "Fintech startups should not start from nothing, but should be able to pour customer-related transaction information into startups, and there are an increasing number of such ecosystem players in China." Finally, he diagnosed that the digitization of finance is still insufficient compared to advanced markets such as the U.S. and the U.K., and whether it is possible to create a profit model is still unclear. If this current governance structure is maintained, it is difficult to create a new platform ecosystem, and the urgency for market restructuring is also reduced." CEO Park said, "We need to know what policies we need to take to innovate digital destruction in the future," adding, "Policy authorities should play the role of helmsman."

IT companies are creating a digital ecosystem... Banks are actively responding

[Choice Economy Reporter Kim Seulgi] "China's Alibaba and Tencent, the U.S.-based Google, Korea's Naver and Daum Kakao are now working to build a digital ecosystem. The world where digital controls the entire society, including economy and culture, is just around the corner."

Park Sang-soon, CEO of DBK Partners, who previously led Boston Consulting's Korean financial part, introduced the changes that the digital environment will make to the financial market at the 2015 Financial Seminar (sponsored by KB Financial Group, Shinhan Bank) held at the Youth Training Center in Eulji-ro, Seoul on the 26th and stressed to college students, "It is time to prepare for the new environment for the future."

CEO Park Sang-soon said, "FinTech, a combination of financial and technology, has become a hot topic in recent years because digital has a huge impact on the financial market. Digital has created an environment where customers can collect information they need anytime, anywhere and reflect their demands on their products. In addition, huge amounts of recorded data are creating new value-added services. This digital environment is also bringing about changes in the financial market."

"Banks' concerns began as fewer customers visited their stores for financial transactions. Due to competition and employment problems within the industry, the number of branches cannot be reduced, but profits are continuously decreasing. The banking industry's gross return on assets (ROA) is one-third of what it was eight years ago. In addition, as IT companies have recently entered the fintech sector, there are concerns about customer churn. This is why banks are seeking fintech through various channels recently"

"The fintech revolution will take place under the leadership of start-up groups, IT companies, and traditional financial institutions," he says. "In the case of start-ups, you can get great help in raising capital through fintech. P2P landing and cloud funding are representative. IT companies such as Alibaba, Tencent in China, Naver in Korea, and Daum Kakao are no longer just creating business channels. Within the digital world they built, they are making the services they provide part of their customers' lives. It is the same trend to provide financial services following chat, games, and taxis," he explained.

"In the case of existing financial institutions such as banks, fintech is a matter of survival. However, since it is difficult to create contact points with new customers compared to IT companies, we are using technology development through startup support centers or partnerships with some companies," he added.

"The era of Internet banking will begin in earnest once applications for preliminary approval are made by October. Internet banking will be an oligopoly just like Internet businesses. Only a few companies will survive the fierce competition."

Regarding the outlook for regulations on Internet banks, he explained, "Existing banks have been subject to very conservative regulations, and Internet banks are also expected to be subject to regulations at the level that banks receive, with only a degree of difference. However, conservative regulations in the field of innovation should be supplemented. A typical move is to ease restrictions on corporate ownership of banks."

CEO Park Sang-soon said, "It is important for university students who have all the possibilities open up to strengthen their ability to contribute to the digital field. In addition, there is a limit to what you can achieve alone, so you need to respect your partner and try to combine your strengths through various experiences. You are the 'digital native' who grew up in the digital environment, so you are highly adaptable to new changes. Have a dream and jump into the rapidly changing digital environment."

‍