[Exclusive] Toss Set to Become First Fintech Financial Conglomerate... To Face Financial Group-Level Regulations

Toss Securities Meets Capital Requirements Amid Stock Market Boom

Toss Set to Become First Fintech Financial Conglomerate in July

Significantly Strengthened Capital Regulation and Internal Control Responsibilities

Kakao Excluded... In

Toss is expected to become the first fintech (financial + technology) company to be designated as a financial conglomerate. Having started as a mobile easy transfer service, Toss has rapidly grown into a financial platform encompassing banking, securities, and insurance sales, and will now be subject to the same level of supervision and regulation as a financial group. This move is seen as a signal that fintech companies are being incorporated into a stricter regulatory framework under the financial authorities, and there are expectations that discussions on financial regulations for big tech companies such as Kakao and Naver could intensify in the future.

Toss: From Money Transfer App to Financial Group... Set to Become the First Fintech Designated as a Financial Conglomerate

According to the financial sector and financial authorities on May 19, Toss is understood to have met the requirements for designation as a financial conglomerate. A representative from the financial authorities stated, "Toss operates across banking, securities, and other financial businesses, and the asset size of each financial affiliate has exceeded 5 trillion won," adding, "It is highly likely that Toss will be included in the new designations for financial conglomerates in July."

A financial conglomerate is a regulatory system that manages and supervises risk transfer, concentration, and intra-group transaction risks at the group level. It was introduced in 2021 to prevent the insolvency of a particular affiliate from spreading to others. Currently, seven corporate groups have been designated: Samsung, Hanwha, Mirae Asset, Kyobo, Hyundai Motor, DB, and Daou Kiwoom.

Under the current regulations, to be designated as a financial conglomerate, a group must operate at least two of the following businesses: lending and deposit-taking, financial investment, or insurance. Additionally, the total assets of the smallest business segment among these must also exceed 5 trillion won.

Toss owns Toss Bank (lending and deposit-taking business) and Toss Securities (financial investment business). In particular, thanks to a booming stock market, Toss Securities' assets increased from 3.491 trillion won at the end of 2024 to 7.2035 trillion won at the end of 2025, thereby meeting the requirements for designation as a financial conglomerate. Toss Bank's assets amount to 33.0382 trillion won.

In contrast, Kakao will be excluded from this round of financial conglomerate designations. Although Kakao Bank's assets are expected to reach 77.6634 trillion won by the end of 2025, the assets of its non-core subsidiaries, Kakao Pay Securities (2.3442 trillion won) and Kakao Pay Insurance (159.1 billion won), do not reach the 5 trillion won threshold.

Within the financial sector, the possibility of Toss being incorporated as a financial conglomerate is being evaluated as a turning point for the fintech industry. This means that a platform company that previously provided simple money transfer and payment services is now integrating traditional financial businesses such as banking, securities, and insurance sales, and is being brought under the supervisory framework of a large financial group.

Lee Jeongdu, Senior Research Fellow at the Korea Institute of Finance, commented, "In the case of Toss, all major businesses are in finance, so each affiliate has already been supervised, but if designated as a financial conglomerate, it would be the first among fintech and big tech companies, carrying symbolic significance and a higher level of regulation." He added, "Going forward, financial authorities will more closely scrutinize the entire group centered on Viva Republica (operator of Toss and largest shareholder of Toss Bank), including its governance structure, inter-affiliate transactions, and whether there is substantive control being exercised."

Capital Regulation and Internal Control Responsibilities Significantly Strengthened... FSC Revises Supervision System for Electronic Financial Businesses

Toss Bank headquarters in Gangnam-gu, Seoul. Photo by Jinhyung Kang aymsdream@

If Toss is designated as a financial conglomerate, the level of regulation will be significantly strengthened. First, capital adequacy at the group level must be managed separately and maintained at over 100%. The financial authorities will assess additional group-level risks every year and determine the necessary capital size based on the results.

In addition, major issues such as ownership and governance structure, internal control, risk management, intra-group transactions, and concentration of risk must be disclosed and reported to the financial authorities. For intra-group transactions exceeding 5 billion won, board approval is required, and if the group's financial soundness deteriorates, a management improvement plan must be submitted. Every three years, a risk management assessment by the financial authorities is also required.

Within the financial sector, there has been ongoing criticism that the regulatory system has been relatively lax compared to the rapid expansion of fintech and big tech into the financial industry. In particular, as platform-based financial services have grown rapidly, concerns have been raised that system failures or payment disruptions could escalate into risks for the overall financial system, and calls for stronger regulation have increased. Senior Research Fellow Lee projected, "The ongoing debate about designating and managing big tech companies such as Kakao and Naver as financial conglomerates is likely to intensify."

The financial authorities, in line with Toss's potential designation as a financial conglomerate, are also revising the supervisory framework for electronic financial businesses. The Financial Services Commission recently announced a proposed amendment to supervisory regulations that would include electronic financial businesses within the scope of financial companies subject to financial conglomerate supervision.

Previously, even within the same easy payment and transfer business, some electronic financial businesses were classified as financial businesses, while others were classified as IT businesses, leading to inconsistent inclusion in the scope of supervision. For example, a company like Viva Republica, which operates Toss and conducts electronic financial business but is registered as an IT business by industry classification, could previously be excluded from the scope of financial conglomerate supervision even if designated as one. Even among Toss affiliates, banks and securities companies were subject to supervision, but payment and remittance affiliates could have been excluded. With this regulatory amendment, any company engaged in electronic financial business will be included within the scope of financial companies subject to financial conglomerate supervision, regardless of industry classification.

An official from the Financial Services Commission explained, "As platform-based fintech companies' influence in the financial market increases, some electronic financial businesses have been excluded by law from the definition of financial companies," adding, "By including electronic financial businesses within the scope of financial conglomerate supervision, we aim to enhance the effectiveness of internal control and risk management, and strengthen consumer protection."

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