Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
KakaoPay Securities seeks to capture young investors
KakaoPay Securities CEO Kim Dae-hong speaks during a press conference held at Glad Hotel on Yeouido, Seoul, Wednesday. / Courtesy of KakaoPay Securities
By Kim Bo-eun
By Kim Bo-eun
KakaoPay Securities CEO Kim Dae-hong announced on Wednesday the company's decision to launch new bond funds and pledged to continue offering “innovative products” in its retail business.
The securities firm is creating a unique position in the market for brokerage services in an attempt to secure young customers in their 20s and 30s, by offering convenient tech-based services and lowering entry barriers for making investments.
From that standpoint, Kim stressed the firm was aiming to become a serious platform-based securities operator based on what he called a “TechFin” model, a term used to describe a tech company delivering financial products.
“That's because our services are based on the KakaoTalk application. We can add more fun factors to the platform and such strengths will help potential investors pay more attention to investment,” he told reporters during a press conference. It was the first press event held since the launch of the brokerage.
Among KakaoPay Securities' customers, 62.1 percent are in their 20s and 30s, 21.9 percent are in their 40s and 11.5 percent are in their 50s.
“Our competitiveness stems from the fact that we are connected to the KakaoPay platform with 33 million users, as well as to KakaoTalk,” Kim said.
Financial Services Commissions approved KakaoPay's deal to acquire major stakes in Baro Investment & Securities. KakaoPay officially launched the brokerage unit in February.
“The reason KakaoPay acquired Baro Investment & Securities is because the brokerage only dealt with wholesale business. This meant that we were able to build the new brokerage's retail business from scratch,” the CEO said.
He elaborated the brokerage unit is better positioned for synergy as it will work together with KakaoPay. KakaoPay initially launched as a mobile money transfer service affiliated with KakaoTalk. KakaoPay has developed into a financial services platform on which users can sign up for insurance policies or invest in products.
KakaoPay Securities has so far received 1.4 million accounts in the four months since the start of its operation, and over 420,000 investments have been made in its “accumulative investment” products.
These products are allowing KakaoPay users to invest the small amounts of money that remain in their accounts after they make online payments. Money remains after making payments because KakaoPay users charge their accounts with cash.
Kim said the securities firm has taken this approach to better appeal to customers.
On KakaoPay Securities' application, customers can make investments starting at 1,000 won (less than a dollar). Terms explaining investment options have also been broken down, so that investors with little experience are able to understand the products.
“Because making investments was considered to require expertise, money in Korea has flocked to savings accounts and real estate. But financial assets will continue to grow,” he said.
The brokerage currently offers global stock funds. The new bond funds are comprised of one that invests in local bonds and another in global bonds. Kim said as the securities firm is in its early stages of attracting investors, it is currently seeking to offer investment products that provide relatively safe returns.
As KakaoPay Securities is in the process of setting up its retail business, growth in profit is not its priority, he said. “After setting up the retail business, we will move on to digitization in the investment banking business.”
Regarding the specifics of its mid- to long-term growth strategies, it plans to operate in-house asset management services using big data and artificial intelligence (AI)-based metrics. Data held by KakaoPay will be used.