Securities Industry, Is a Late Shift Triggered by KakaoTalk Underway?

A Platform Used by 46 Million People Monthly
Mass Exodus of Financial Customers Aged 20-30 Predicted

[Asia Economy Reporter Hwang Jun-ho] #1. Kim Jin-young, a college student and beginner stock investor, decided to buy stocks of a KOSDAQ-listed company after hearing new information while chatting with friends from his stock club on KakaoTalk (KakaoTalk). In the fast-paced world of stock investing, his choice was KakaoTalk. Rather than opening a separate securities app and waiting for authentication, he preferred to trade directly on KakaoTalk.

This is the everyday scenario unfolding as stock trading services are added to KakaoTalk, a platform used by 46 million people monthly. With the convenience of stock trading greatly improved, the normalization of stock trading is expected to accelerate further. Although it may seem like a small change, a seismic shift is anticipated in the existing financial investment industry.

The Beginning of Platform Economy in Financial Investment Business

Kakao Pay Securities Account Growth Trend

Providing stock trading services on KakaoTalk will trigger a platform economy in stock trading. It will enable users to enjoy various financial services while staying within KakaoTalk. This phenomenon is already evident through Kakao Pay Securities.

Kakao Pay Securities offers fund trading services via KakaoTalk and Kakao Pay, attracting 1.6 million subscribers in the first quarter of this year alone. Since its launch last year, it has secured 4 million accounts within a year. Kakao Pay stated, "With 36 million Pay subscribers, it can be said that the entire economically active population is subscribed," adding, "We see the number of subscribers increasing due to improved accessibility and convenience."

Kakao Pay is preparing for a public listing by the end of this year. The funds raised through the listing will be used to strengthen investment services. Kakao Pay submitted its preliminary listing review application in April, and the results are expected by the end of this month. If it passes the review, listing can occur within six months. An industry insider said, "Kakao Pay is rushing the listing considering the favorable IPO market this year and the listing of Kakao Bank."

Securities Firms Are Actively Pursuing Digital Transformation, but...

In response to these changes, existing securities firms are hastening their digital transformation by expanding non-face-to-face channels. A securities firm official explained, "We are working to enhance our digital capabilities through various collaborations with big tech companies or by exploring direct investments in Kakao Bank, like Korea Investment & Securities."

However, opinions suggest that it will be difficult for existing securities firms to catch up with KakaoTalk. Hwang Se-woon, a research fellow at the Capital Market Research Institute, analyzed, "If KakaoTalk rises as a mass platform securities firm, the position of existing securities firms will inevitably weaken. For the rapidly increasing stock investor population in their 20s and 30s, KakaoTalk is naturally more convenient than securities apps." Due to soaring real estate prices making access difficult, people in their 20s and 30s have flocked to the stock market, which surged after COVID-19 last year. According to the Korea Securities Depository, the number of individual investors last year was 9,107,228, with the largest increase in the 30s age group, and investors aged 30 and below numbered 3.15 million.

Research fellow Hwang forecasted, "From the perspective of existing securities firms, unless they collaborate with platforms like KakaoTalk, strengthening traditional areas such as corporate finance and corporate evaluation to expand expertise might be the winning strategy."

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