KakaoBank's Pangyo office in Seongnam, Gyeonggi Province / Newsis

KakaoBank said Tuesday that it began selling six mutual fund products. This is the first time for an internet-only bank in Korea to launch such a service.

According to the bank, the new service will start on Tuesday. These funds have been selected carefully based on evaluations of their fund management performance and risk statistical indicators.

The selection includes a fund that invests primarily in stocks of companies of developed countries and around Asia, as well as a fund that focuses on U.S. dividend stocks and bonds, a fund investing in gold exchange-traded funds (ETFs), a fund concentrating on U.S. corporate bonds, funds dedicated to investments in initial public offerings (IPOs) and government and municipal bonds.

In light of the recent concerns regarding the potential massive defaults of customers who invested in equity-linked securities (ELS) tied to the Hong Kong stock market, there have been concerns that KakaoBank's customers might not receive adequate explanations about these products, given that the bank does not operate physical branches.

However, KakaoBank has stated that it has implemented thorough checking procedures to prevent any irresponsible selling practices.

For instance, before subscription, investors are required to complete an investment preference analysis. This requires the investors to answer seven questions regarding available investment funds and their past investment experience. Based on these answers, KakaoBank restricts the customer from subscribing to funds that are deemed too risky in comparison to their investment profiles.

Complex financial terminology is simplified as well. The key attributes of each fund are highlighted in a concise three-line summary on the product page. Additionally, customers receive monthly reports detailing the performance and portfolio changes of their invested funds after subscription.

Following the launch of its fund service, KakaoBank is also considering the introduction of additional protective measures for customers new to investing, such as elderly investors.

A notable aspect of this fund service is that it operates independently under KakaoBank's own license, rather than through a collaboration with a securities firm. KakaoBank has expressed its commitment to progressively broadening its range of investment services.