Summary
Korea's Financial Services Commission is set to designate Viva Republica (Toss) as the first fintech "financial conglomerate" under the 2021 framework, joining seven traditional conglomerates. The designation requires group-level capital adequacy standards, detailed governance and ownership disclosure, board approval for large related-party transactions, and potential management improvement plans. This marks a significant shift as regulators adapt legacy financial supervision frameworks designed for chaebol-style conglomerates to the unique risks of digital platform-based financial services.
Key Points
- Seven existing financial conglomerates: Samsung, Hanwha, Mirae Asset, Kyobo, Hyundai Motor, DB, Daou Kiwoom
- Qualification: operate in ≥2 of 3 sectors (banking, insurance, financial investment) with smallest business >5 trillion won ($3.24B) assets
- Toss qualifies via Toss Bank (~33 trillion won) and Toss Securities (7.2 trillion won)
- Group-level capital adequacy: prevents risk contagion across affiliates
- Related-party transactions >5 billion won require board approval
- Must disclose ownership structure, governance, internal controls, risk management
- Regulators can order management improvement plans if financial soundness deteriorates
- Toss originally launched as P2P money-transfer app in 2015; now 28M+ users
- Also operates Toss Insurance (insurtech), Toss Payments, and Toss Platform
- Korea's Digital Asset Basic Act provides separate crypto regulatory framework
- Comparison: Singapore's MAS designates "systemically important" FIs; India's RBI has scale-based regulation for NBFCs; Japan's FSA uses "comprehensive supervision" for large fintech groups