Debate over Toss’s entry into online investment-linked finance heats up at National Assembly audit; association says conflicts of interest must be prevented

[Financial News] The Online Investment-Linked Finance Association has once again raised concerns about Toss’s direct entry into online investment-linked finance. It warned that adverse effects raised in a recent National Assembly audit, including conflicts of interest and overheated competition, could become reality and ultimately undermine the financial consumer protection framework.
The Association issued a statement on the 14th, saying, “At this audit, an important issue was raised that goes beyond whether a particular company should enter the market: how to create a market environment that protects financial consumers’ rights and allows innovation in new industries to continue.”
At a National Assembly audit held on the 8th by the Political Affairs Committee, Choi Eun-seok of the People Power Party noted that the online investment-linked finance market had taken shape over 12 years through the innovation and efforts of financial startups, and said, “Toss’s ‘free ride’ needs to be examined in light of its impact on the market.”
Choi also questioned whether a comprehensive review was needed—not only of whether new businesses should be allowed to enter, but also of the market structure, relevant regulations, and the corporate governance and business operations of large operators—in order to strengthen the sector’s competitiveness and expand its business.
The ruling party pointed to structural problems. Min Byeong-deok of the Democratic Party of Korea highlighted the potential for conflicts of interest if, as with Toss, a company operates both a loan brokerage platform and an online investment-linked finance business. Possible concerns mentioned included large platforms giving priority exposure to their own products, running algorithms in their own favor, and using competitors’ information.
An Association official said, “Online investment-linked finance is a market that financial startups have built over the past decade or so by accumulating technology and credit-assessment capabilities.” The official added, “It has responded to financial needs, including those of borrowers with medium- to low-credit ratings, that the traditional financial sector could not adequately serve, and has sought new channels for supplying funds through investment linked to financial institutions.”
The online investment-linked finance industry voiced the same concerns on the 10th of last month. At the time, six companies participating in online investment-linked finance and investment linked to financial institutions—MoneyMove, Mowooda, Honest AI, Eight Percent, PFCT, and Hanpass Financial—argued that if large financial platforms entered the limited market directly, they would in effect absorb scarce investment funds and intensify competition.
Hong Jae-mun, chairman of the Online Investment-Linked Finance Association, said, “The issues raised at this audit go beyond whether a particular company should enter the market. They concern how to ensure consumer choice and fairness in the market where financial product brokerage and supply are combined.” He added, “For financial innovation to lead to sustainable results, principles to prevent conflicts of interest and ensure fair competition must also be established.”
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