Growth in South Korea's fintech market has lagged well behind the US and Europe as has the number and value of fintech company transactions. This is despite a record in the global value of fintech deals so far this year fuelled by some mega mergers in recent months.

Mergers and acquisitions made up 65% of fintech investment in 2018 but in South Korea, they counted for just 10% of fintech deals. Similarly there were no M&A deals in excess of WON1 trillion ($846 million) in South Korea. Instead Korea's fintechs are being fuelled by investment from domestic and overseas venture capitalists. 

Despite the regulator's call for greater competition among fintechs, overly-conservative regulation has been cited as a possible obstacle to greater fintech activity.

After all, there are some encouraging trends to suggest better fintech prospects in the future. The FSS's statistics show that fintech payment transactions increased by more than 2,500% over the last 15 months. Remittances have proved especially popular for fintechs in South Korea as consumers abandon traditional banking channels for their overseas transfers. In the first quarter of 2019, more than $365 million in transfers were processed, compared to just $14 million in the last quarter of 2017.

However, regulation in Korea limits the size of overseas money transfers made by banks to just $3,000. The FSS is planning to increase this cap to $5,000 later in the year but it remans to be seen how far the regulator is willing to relax its various caps in order to encourage greater growth in the fintech market.