This paper examines the key features, benefits and risks, and its risktransmission channel of FinTech. It also looks at the FinTech development inKorea and the responses of financial institutions, and assesses the related risksto financial stability. Financial services provided by Korean FinTech companiesinclude Easy payment and Easy transfer services, P2P finance, crowd-funding,initial coin offering(ICO), and robo-advisor. Internet-only banks also haveshown rapid paces of growth based on the convenience of their non-face-to-facechannels, stimulating financial innovation by the existing banks. Financialinstitutions are responding to these FinTech innovations taking place in diversefinancial domains through competition and cooperation with FinTech companies.So far, the market size of services provide by FinTech companies is not largeand its linkage with existing financial institutions is low. The competitionbetween financial institutions and FinTech companies has also been limited. Inview of this, it is judged that at present FinTech innovation is unlikely to havenegative impacts on financial stability through bringing about any increasedfinancial institution risk-taking. It seems desirable to push the ahead withlegalization of the regulatory sandbox and establishment of FinTech relatedregulation, so as to emphasize positive effects of FinTech innovation such asenhancing efficiency and bringing about catfish effects. There is however a needfor attention to the likelihood of cyber-risks and third party risks, as thecompetition between financial institutions and FinTech companies intensifies andthe spread of FinTech accelerates.