Can Kakao Pay bring new blood to securities industry? - The Korea Times
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Can Kakao Pay bring new blood to securities industry?

Korea's major fintech platform Kakao Pay has successfully entered into the securities industry, with Financial Services Commission's final approval on Feb. 5. / Courtesy of Kakao Pay
Korea's major fintech platform Kakao Pay has successfully entered into the securities industry, with Financial Services Commission's final approval on Feb. 5. / Courtesy of Kakao Pay

By Anna J. Park

As Kakao Pay has made its foray into the securities industry, market watchers expect the mobile-based app will bring about a further expansion of the market by fully employing its strength in big data and providing customized financial services. Kakao Pay is one of Korea's largest fintech platforms with about 30 million users registered as of 2019.

The Financial Services Commission (FSC) granted a final approval earlier this month for the financial arm of the Kakao Talk messenger platform to become the majority shareholder of Baro Investment & Securities by owning a 60 percent stake in the brokerage house. It changed the name of the company to Kakao Pay Securities.

Since the FSC granted approval to the acquisition on Feb. 5, the fintech company specializing in money transfer and pre-paid payment tools has been receiving the first batch of applications from Kakao Pay customers who'd like to upgrade their accounts into brokerage accounts.

The firm said the account upgrade will be possible from Feb. 20 to 26, and users would be able to purchase investment products like stocks, bonds and funds.

Digital stock platform expert Kim Dae-hong, who had previously led the successful online business department of Mirae Asset Daewoo Securities, has been newly appointed as Kakao Pay Securities' CEO.

Kim had more than 18 years of experience at major securities firms before he joined Kakao Pay in February 2019 to lead the mobile app's acquisition of Baro Investment & Securities. Kim will take charge in overall management of the firm, as well as its retail department, while co-CEO Yoon Gi-jeong will continue to lead corporate finance.

CEO Kim vowed to focus on successfully stabilizing the newly-created retail department as well as strengthening corporate financing, while the firm maintains close cooperation with Kakao Pay.

"Kakao Pay Securities will offer close-knit investment platforms for everyone in their daily lives, by breaking pre-existing grammar in the financial sector," Kim said in a press release.

"Kakao Pay and Kakao Pay Securities aim to achieve synergy by creating an entirely new investment culture through a fintech platform," an official from Kakao Pay told The Korea Times.

"Kakao Pay platform's ease of use, strong connectivity and technology will expand the area of financial services for those who do not have enough financial experiences or those who have a small asset size, as it allows them to easily enter into the financial market and to expect profits from various products with a smaller amount of money," he added.

Analysts expect the firm to grow rapidly, based on its strong B2C model.

"Kakao Pay Securities will be growing fast. As the brokerage firm did not offer an entirely new business model, the firm is expected to grow by creating a new stock market model, rather than taking customers from other securities companies," Jeong Tae-joon, analyst at Yuanta Securities told The Korea Times.

Hwang Seung-tae, analyst at Hana Financial Investment, agrees that the new securities house will take full advantage of Kakao Talk's far-reaching market power.

"Considering the marketing power of Kakao Talk ― the largest mobile messenger app in Korea, the securities company will have a significant impact on retail business, based on its strength in mobile-based B2C services," Hwang told The Korea Times.

"However we still need to wait and see to figure out the firms' impact on areas such as alternative investments, and real estate project or corporate financing," he added.


Korea's major fintech platform Kakao Pay has successfully entered into the securities industry, with Financial Services Commission's final approval on Feb. 5. / Courtesy of Kakao Pay
Korea's major fintech platform Kakao Pay has successfully entered into the securities industry, with Financial Services Commission's final approval on Feb. 5. / Courtesy of Kakao Pay

By Anna J. Park

As Kakao Pay has made its foray into the securities industry, market watchers expect the mobile-based app will bring about a further expansion of the market by fully employing its strength in big data and providing customized financial services. Kakao Pay is one of Korea's largest fintech platforms with about 30 million users registered as of 2019.

The Financial Services Commission (FSC) granted a final approval earlier this month for the financial arm of the Kakao Talk messenger platform to become the majority shareholder of Baro Investment & Securities by owning a 60 percent stake in the brokerage house. It changed the name of the company to Kakao Pay Securities.

Since the FSC granted approval to the acquisition on Feb. 5, the fintech company specializing in money transfer and pre-paid payment tools has been receiving the first batch of applications from Kakao Pay customers who'd like to upgrade their accounts into brokerage accounts.

The firm said the account upgrade will be possible from Feb. 20 to 26, and users would be able to purchase investment products like stocks, bonds and funds.

Digital stock platform expert Kim Dae-hong, who had previously led the successful online business department of Mirae Asset Daewoo Securities, has been newly appointed as Kakao Pay Securities' CEO.

Kim had more than 18 years of experience at major securities firms before he joined Kakao Pay in February 2019 to lead the mobile app's acquisition of Baro Investment & Securities. Kim will take charge in overall management of the firm, as well as its retail department, while co-CEO Yoon Gi-jeong will continue to lead corporate finance.

CEO Kim vowed to focus on successfully stabilizing the newly-created retail department as well as strengthening corporate financing, while the firm maintains close cooperation with Kakao Pay.

"Kakao Pay Securities will offer close-knit investment platforms for everyone in their daily lives, by breaking pre-existing grammar in the financial sector," Kim said in a press release.

"Kakao Pay and Kakao Pay Securities aim to achieve synergy by creating an entirely new investment culture through a fintech platform," an official from Kakao Pay told The Korea Times.

"Kakao Pay platform's ease of use, strong connectivity and technology will expand the area of financial services for those who do not have enough financial experiences or those who have a small asset size, as it allows them to easily enter into the financial market and to expect profits from various products with a smaller amount of money," he added.

Analysts expect the firm to grow rapidly, based on its strong B2C model.

"Kakao Pay Securities will be growing fast. As the brokerage firm did not offer an entirely new business model, the firm is expected to grow by creating a new stock market model, rather than taking customers from other securities companies," Jeong Tae-joon, analyst at Yuanta Securities told The Korea Times.

Hwang Seung-tae, analyst at Hana Financial Investment, agrees that the new securities house will take full advantage of Kakao Talk's far-reaching market power.

"Considering the marketing power of Kakao Talk ― the largest mobile messenger app in Korea, the securities company will have a significant impact on retail business, based on its strength in mobile-based B2C services," Hwang told The Korea Times.

"However we still need to wait and see to figure out the firms' impact on areas such as alternative investments, and real estate project or corporate financing," he added.


Park Ji-won annajpark@koreatimes.co.kr


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