Banking, Stocks, Insurance... Kakao Leaps Forward as a Comprehensive Financial Platform

'Kakao Pay Securities' Launch Followed by Final Preparations for Digital Insurer Establishment
44 Million Members on 'KakaoTalk' Platform Signal Disruptive Potential Different from Traditional Financial Firms

Ryu Young-jun, CEO of Kakao Pay, is attending 'Kakao Pay Day 2019' held at Glad Hotel in Yeouido, Seoul on May 20 last year, announcing major business plans. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jin-gyu Lee] "From banking services to stock investment and insurance subscription, all through KakaoTalk (KakaoTalk)..."

Kakao is emerging as a leading TechFin company in Korea, providing services across the entire financial sector including banking, stocks, and insurance. After becoming the largest shareholder of KakaoBank at the end of last year, it recently entered the securities business through the acquisition of a securities firm and is soon set to make a full-fledged challenge in the insurance industry. Based on KakaoTalk, which has about 44 million members, it is expected to demonstrate a disruptive power far beyond that of existing financial companies.

According to the industry on the 8th, KakaoPay is in the final stages of establishing a digital non-life insurance company together with Samsung Fire & Marine Insurance. They are promoting a digital insurance consortium to combine Kakao's IT capabilities with Samsung Fire & Marine Insurance's insurance business expertise. The digital non-life insurance company promoted by KakaoPay and Samsung Fire & Marine Insurance is expected to apply for preliminary approval from the Financial Services Commission early next month.

A KakaoPay official explained, "To attempt various innovations, we judged that it was necessary to go beyond providing an insurance sales platform and take on the role of an insurance product producer that can quickly respond to user needs, which led us to promote the digital insurance consortium." As part of its entry into the insurance business last year, KakaoPay acquired the insurtech platform startup 'Inbyu' and launched 'KakaoPay Simple Insurance.'

The digital insurance consortium aims to protect the entire population from everyday risks by trying innovative ideas based on insurtech to resolve insurance blind spots. A KakaoPay official said, "We are aiming to apply for preliminary approval after concretizing our insurance business plans," adding, "KakaoPay will hold management rights, and Kakao and Samsung Fire & Marine Insurance will participate as strategic investors, but specific details have not been finalized."

KakaoPay is also accelerating its expansion in the securities business. On the 6th, it completed the acquisition of Baro Investment & Securities as a subsidiary and changed its name to 'KakaoPay Securities.' KakaoPay and KakaoPay Securities plan to lead the 'popularization of investment and asset management' so that asset management services, which were previously concentrated among a small number of wealthy individuals and financial experts, can be experienced by anyone through synergy.

KakaoPay's lifestyle finance platform is connected to KakaoPay Securities. They plan to upgrade KakaoPay Money to a securities account to enhance user benefits and diversify investment product portfolios through KakaoPay Securities by opening fund products in the 'KakaoPay Investment' service.

In the long term, based on KakaoPay's big data and artificial intelligence (AI) technology, they plan to expand investment services such as new types of investment solutions and advisory asset allocation services that allow users with little investment experience to earn profits more easily. Furthermore, they are also planning innovative non-face-to-face asset management services using robo-advisors.

Meanwhile, on November 22 last year, Kakao secured a 34% stake in KakaoBank (KBank), becoming its largest shareholder. Since then, it has been accelerating the expansion of comprehensive financial services centered on KBank and KakaoPay.

This content was produced with the assistance of AI translation services.