"Lifetime Free Currency Exchange Thanks to a Unique System Development"... Kim Seung-hwan, Tobang FX PO [Financial Insider]

"All Foreign Exchange Transactions Start with Currency Exchange"
Integration with Global Banks and APIs is the Secret to No Fees
Launching Foreign Currency Accounts with No Currency Exchange Fees
Building Foreign Exchange Service Infrastructure
"All Foreign Exchange Services Will Be Conveniently Available in the Future"

Last January, Toss Bank launched a foreign currency account with the slogan "Free the world's money." They offered a 100% preferential exchange rate service with no conditions, available to both existing customers and those newly joining Toss Bank. After declaring the complete elimination of foreign exchange fees, the number of foreign exchange service users surpassed 1 million on the 8th, 105 days later. The cumulative foreign exchange transaction volume reached 5.8 trillion KRW as of the 30th of last month. On that day, we met Kim Seunghwan, the FX (Foreign Exchange Trading Squad) PO (Product Owner) who led the development of this service at Toss Bank's headquarters in Gangnam, Seoul. He stated, "Because of the foreign currency procurement method linked with global partner banks through Application Programming Interfaces (APIs), we were able to offer customers 'lifetime free currency exchange.'"

At the time of the foreign currency account launch, Toss Bank pointed out that the fundamental problem with foreign exchange services of existing financial institutions lies in the exchange fees. Overseas remittances, overseas stock investments, forex trading, and overseas payments all start with currency exchange. Kim PO explained, "The existing financial institutions' currency exchange is problematic firstly because the exchange process itself is inconvenient, and secondly because it is expensive due to preferential rates and other factors."

Kim PO considered various methods to solve the inconvenience of currency exchange. He analyzed the pros and cons of branch-based currency exchange, foreign currency delivery, and prepaid electronic payment methods (services that allow exchange within pre-charged amounts linked to accounts) offered by existing banks. However, the inconvenience felt by customers remained. Something that commercial banks had not attempted needed to be created.

Kim Seunghwan, Product Owner (PO) of Toss Bank FX (Foreign Exchange Trading Squad), is being interviewed by our newspaper on the 8th. [Photo by Toss Bank]

That "something" was API integration with foreign exchange trading banks. The foreign exchange market prices are formed by bids and offers from numerous participants. Corporations, institutions, and banks use Reuters, Bloomberg, and others to bid to banks at the prices they want to buy foreign currency. They propose prices to each other, and other participants buy at the proposed prices. Understanding this structure, Kim PO partnered with 4 to 5 global banks and integrated APIs. Through API integration, whenever a customer exchanges currency, the linked banks automatically bid at the best price, and when they receive offers from other market participants, the exchange is immediately executed for the customer. He said, "The secret to free currency exchange fees is the API integration with partner banks," adding, "Building and integrating the system is a very difficult and complex task, which makes it hard for other banks to do and something only we can accomplish."

Kim PO explained that the reason Toss Bank alone succeeded in system integration despite these difficulties is because it has a different core banking system (financial business processing system) than commercial banks. The core banking systems of existing banks are stable and have advantages in security but have the drawback of being 'heavy,' causing slower processing speeds. In contrast, Toss Bank has computer languages and server environments similar to those of gaming companies or general IT (Information Technology) companies, enabling immediate deployment or release upon development. It also has the advantage of flexible responses in accounting, finance, and security. Another reason for rapid development is that the team is operated as a squad combining the foreign exchange business and development departments of existing commercial banks. Developers, designers, data analysts, and business staff work together from the start of the business to product development, allowing developers and planners to collaborate closely and compress the development process.

The foreign currency account, launched based on the elimination of exchange fees, forms the foundation of all foreign exchange services developed by Toss Bank. Kim PO said, "With just one foreign currency account without exchange fees, overseas remittances can be made immediately without fees as soon as Toss Bank completes development, and investments can be made directly through partnered securities company applications," adding, "It enables all financial activities." He also mentioned that since they have built this massive infrastructure called the foreign currency account, it will not take long to introduce various products. Kim PO stated, "There is no fixed product lineup yet, but all research on linked securities accounts, overseas remittances, and domestic foreign currency remittances has been completed," and added, "We will not simply release products like other banks; we approach each product launch with the mindset of solving one foreign exchange market problem at a time."

Kim Seunghwan, Product Owner (PO) of Toss Bank FX (Foreign Exchange Trading Squad), is giving an interview to this publication on the 8th. [Photo by Toss Bank]