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| KakaoBank / Courtesy of KakaoBank |
By Anna J. Park
KakaoBank has earned preliminary approval from financial authorities to extend its business into financial investment and brokerage operations. If it receives the regulator's final authorization, the mobile-based lender will be the first internet-only bank in Korea qualified to sell mutual funds online via its mobile platform.
According to the Financial Services Commission (FSC) on Sunday, the top financial regulator's Securities and Futures Commission granted preliminary permission to KakaoBank's to extend its business operation to include collective investment securities, trading and brokerage, during the commission's regular meeting in late February.
During the meeting, the financial regulator raised concerns about the mis-selling of fund products to consumers, as KakaoBank does not operate in-person consultations. The internet-only bank's consumer protection measures were also scrutinized during the meeting, as to check whether KakaoBank effectively deals with consumer complaints on its online platform. KakaoBank will be required to set up proper sales procedures and internet control measures to acquire the final grant from the regulator.
Regarding such concerns, KakaoBank plans to operate a 24-hour online consulting channel via its mobile application. With the extension of business operations, KakaoBank plans to increase its profits from non-interest income, while strengthening the platform's competitiveness and growth potential.
Given that KakaoBank is slated to request the final permission within six months of acquiring preliminary permission, the bank may be able to sell financial investment products such as mutual funds as early as the second half of this year.
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