KakaoBank, 'First Internet Bank' to Start Fund Sales

6 Products

KakaoBank announced on the 16th that it has started selling funds for the first time among internet banks.

The company selected six public fund products after reviewing fund performance and risk statistical indicators. These include funds investing in stocks of companies in developed countries, funds investing in stocks of Asian companies, funds focusing on U.S. dividend stocks and bonds, funds investing in gold ETFs (Exchange-Traded Funds), funds mainly composed of U.S. corporate bonds, and funds investing in public offerings and government bonds. KakaoBank plans to continuously add more fund products in the future and is also considering launching exclusive fund products only for KakaoBank customers.

The service is designed so that customers without investment experience can clearly understand and subscribe. Customers must undergo an ‘investment propensity analysis’ before subscribing. They need to answer seven questions including ‘investable amount’ and ‘investment experience.’ Based on the analysis results, subscriptions to products that are risky relative to the customer’s profile are restricted.

KakaoBank explains that product descriptions are delivered accurately and simply. For example, difficult terms in investment prospectuses such as ‘purchase’ and ‘redemption’ are explained as ‘investment’ and ‘withdrawal.’ The product information page provides a ‘three-line summary’ of the fund’s key features. Frequently asked questions are pre-explained in the ‘FAQ’ section.

At the time of subscription, the possibility of principal loss is confirmed once again through a quiz. After subscribing to a fund, monthly reports will provide ‘rate of return’ and ‘fund portfolio changes’ to make it easy for customers to understand the status of their invested products. Additional protective measures for elderly investors and others are also being considered.

With this service launch, KakaoBank has expanded its investment product lineup to include funds, following stocks, bonds, and issued notes. Notably, this service is introduced based on its own license rather than through partnerships with securities firms. KakaoBank received approval for ‘financial investment business’ from the Financial Services Commission in July and prepared to launch this service. It expects to receive commissions from asset management companies for fund sales, which will contribute to non-interest income.

A KakaoBank official said, “We have prepared this service to provide an opportunity for customers to easily access unfamiliar fund investments,” adding, “Even after the launch, we will continue to strive to ensure customers can invest safely through easy explanations and monitoring as investor protection measures.”