Toss Group's payment and remittance electronic financial service providers will now be included in the group's internal control and risk management framework. This measure aims to eliminate regulatory gaps that previously excluded certain providers from oversight based on their industry classification.
The Financial Services Commission announced on July 31 that it approved amendments to the 'Supervision Regulations for Financial Conglomerates' during its 14th regular meeting.
On July 15, the commission designated eight groups, including Samsung, Hanwha, Mirae Asset, Kyobo, Hyundai Motor, DB, Daou Kiwoom, and Toss, as financial conglomerates for this year. Toss was the first among big tech financial groups to receive this designation.
Being classified as a financial conglomerate means that the group must manage internal transactions, risk concentration, and the potential for financial distress across its affiliates. However, some electronic financial service providers had previously been excluded from oversight because they were not classified under the 'Finance and Insurance' category of the Korean Standard Industrial Classification.
Electronic financial service providers offer services such as easy payments, remittances, prepaid card issuance, and online payment processing. Even if they belong to the same group and perform similar functions, regulatory discrepancies arose when their industry classifications differed, leading to some companies being exempt from internal control and risk management.
The Financial Services Commission has amended the regulations to include electronic financial service providers not classified under finance and insurance as part of the affiliated financial companies within financial conglomerates. Consequently, risks arising from operational issues, such as system failures or data breaches, will now be managed at the group level to prevent spillover effects to other financial affiliates like banks and securities firms.
The expansion of fintech and big tech companies into banking, securities, and insurance has increased interconnections among affiliates, further motivating this regulatory change.
* This article has been translated by AI.
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