Financial Platforms like KakaoPay Prohibited from Offering Insurance and Fund Comparison Services

No Fund and Pension Comparisons Allowed from the 25th Without Pre-Registration
Financial Services Commission: "Some Financial Platform Services Constitute Unregistered Brokerage"

[Asia Economy Reporter Kim Jin-ho] Going forward, big tech financial platforms such as KakaoPay and Naver Financial must comply with the Financial Consumer Protection Act to provide information by comparing consumer-tailored products like insurance and funds. Financial platforms must complete their registration as intermediaries by the 24th of this month or discontinue the services they have been offering.

On the 7th, the Financial Services Commission held the '5th Financial Consumer Protection Act Implementation Status Inspection Team Meeting' and made this decision. The FSC judged that if a financial platform’s purpose is sales rather than simply providing product information, it should be regarded as 'intermediation.' This means they must adhere to sales principles such as the duty to explain, just like financial companies.

This is interpreted as a move to no longer tolerate big tech financial platforms avoiding regulation by claiming they are merely 'advertising' financial products. Previously, financial authorities ordered KakaoPay to suspend its online investment-linked finance (P2P) product service. Since this occurs within KakaoPay’s 'investment' service, it was regarded as a legitimate 'intermediation' activity.

They also stated that simpler financial products, such as compulsory insurance like automobile insurance or credit loans, are more likely to be recognized as intermediation.

The Financial Consumer Protection Act, which came into effect in March, requires registration or licensing under the law when directly selling financial products or acting as a sales agent, intermediary, or advisor. The controversy over whether fintech companies’ services, which had been in a regulatory blind spot, constitute intermediation stems from this.

An FSC official said, "Since the Financial Consumer Protection Act’s grace period ends on the 24th, the field must promptly resolve any potential legal violations."

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