The online investment-linked finance industry is speeding up the expansion of mid-rate loans for mid-to-low credit borrowers and sole proprietors, helped by regulatory improvements by financial authorities. The Financial Services Commission will raise the ceiling for self-capital investment by online investment-linked finance operators with strong lending performance and credit assessment capabilities for mid-to-low credit borrowers to 40 percent from 20 percent. It will also raise the limit for linked investment by financial companies to 50 percent from 40 percent.

It will also increase the industry-wide investment limit for general investors to 50 million won from 40 million won. The commission plans to expand the scope of linked investment by financial companies from personal credit loans to credit loans for sole proprietors, and to increase participation by mutual finance lenders.

The industry expects easing pressure to raise investment funds will increase its capacity to supply credit loans to mid-to-low credit borrowers who have difficulty raising funds in traditional finance. It also expects the changes will lay a foundation to increase the share of sole proprietor loans, which stood at 2.9 percent of total linked loans at the end of last year.

Financial authorities will also pursue system integration between P2P lenders and a credit scoring model tailored for small merchants that uses sales, business type and commercial district information. The industry plans to use the regulatory improvements to move away from a business structure centered on secured loans and expand the supply of mid-rate credit loans to mid-to-low credit borrowers.

• FSC to expand P2P lending to mid-to-low credit borrowers, raising investment limits • P2P lenders to gain traction in mid-rate loans, expanding base to sole proprietors • P2P industry welcomes FSC reforms: "Targeting mid-rate supply in the 8 percent range"

Financial institutions are also stepping up work to appoint chief executives. Korea Citi Bank recommended Kim Kyung-ho (김경호), an executive vice president of its corporate banking group, as a candidate for the next bank president, starting a process to change its top leader for the first time in 6 years. Kim is expected to be finally appointed after board and shareholder meetings.

Sh Suhyup Bank has not confirmed a final candidate for its next chief. Its CEO candidate recommendation committee held interviews, but no candidate secured the support of at least 4 of the 5 committee members needed to select a final nominee, pushing a conclusion until after the holiday period.

Shinhan Financial Group started its management succession process for chief executives of 12 subsidiaries whose terms end at the end of this year. To raise transparency in the succession process, it will give its bank executive candidate recommendation committee the authority to recommend candidates and make the CEO qualification requirements and evaluation criteria more specific for each subsidiary.

• Korea Citi Bank recommends EVP Kim Kyung-ho as CEO candidate, first leadership change in 6 years • Sh Suhyup Bank fails to pick final CEO candidate after falling short of 4 votes • Shinhan Financial starts selecting CEOs for 12 subsidiaries, expands recommendation powers of the bank nomination committee

Financial authorities are tightening management oversight across bank soundness and support for vulnerable sectors, as well as the governance and internal controls of financial companies.

As of end-July, the delinquency ratio on won-denominated loans at domestic banks was 0.63 percent, up 0.07 percentage points from the end of the previous month, and the delinquency ratio on corporate loans rose to 0.78 percent. With small and medium-sized enterprise delinquencies at a relatively high level, authorities are checking repayment burdens for vulnerable borrowers and soundness trends.

On the support front, policies are being pursued to improve access to funding for small merchants and startups. The FSC unveiled measures to expand financial support for small merchants by at least 1.5 trillion won and to lower financial barriers for startups.

The Financial Supervisory Service has also increased pressure on financial companies' management and internal controls. Lee Chan-jin (이찬진), the FSS governor, met heads of bank holding companies and stressed fairness and transparency in selecting subsidiary CEOs. He also said he would look into the impact of excessive competition in local government depository bidding on banks' soundness and profitability.

For securities firms, he called for strengthening internal controls centered on investor protection. He pointed to sales practices such as inducing excessive credit and margin trading and passing fees and costs onto customers, and stressed that compliance units should play a substantive check in product planning and sales processes.

• Domestic banks' delinquency ratio rises to 0.63 percent; corporate loan delinquency to 0.78 percent • FSC to increase support for small merchants by at least 1.5 trillion won and ease financing barriers for startups • FSS governor Lee Chan-jin warns on bank CEO appointments and excessive depository bidding competition • FSS tells securities firms "no showy investor protection," calls for stronger internal controls

Fintech firms and the financial sector are expanding touchpoints for payment methods and daily services. Moves continue to apply new payment methods such as QR payments and facial recognition payments at offline sites, while connecting financial and lifestyle services with external platforms.

In payments, expanding usage points stands out. K Bank is introducing QR payments at lottery retailers nationwide, and Toss is working with CJ CGV to apply its facial recognition payment service, FacePay, to cinema kiosks. Toss plans to expand the service nationwide starting with the Yongsan I'Park Mall branch.

Danal PayProtocol is also moving to build multi-chain payment and settlement infrastructure with Squid, expanding digital-asset-based payments. In the mobile wallet market, Google Wallet and Samsung Wallet are expanding functions beyond payment cards to include boarding passes, memberships and digital IDs, widening touchpoints with users.

Convenience improvements also continued in financial and lifestyle services. Shinhan Bank expanded its "Shinhan Talk Number Ticket," which lets customers check branch waiting order via Kakao AlimTalk, to all branches. Bizplay and Woori Card moved to cooperate to expand corporate business trip management services. The post office began selling "Book Culture Gift Certificates" at counters nationwide, broadening its lifestyle service area.

• K Bank introduces QR payments at lottery retailers nationwide to improve consumer convenience • Bizplay and Woori Card join hands to expand corporate business trip management services • Shinhan Bank expands "Talk Number Ticket" to all branches, allowing customers to check waiting order on KakaoTalk • Danal PayProtocol and Squid cooperate to build multi-chain payment and settlement infrastructure • Toss and CGV cooperate on facial recognition payments, pushing to apply them to kiosks nationwide • Same Galaxy, but 2 wallets: what is different between Google and Samsung Wallet? • Buying "Book Culture Gift Certificates" at the post office as nationwide sales begin

Moves to expand digital asset businesses are also continuing. As stablecoins, blockchain infrastructure and digital bonds see concrete steps in commercialisation and technical cooperation, regulatory adjustments are emerging as a variable for future market expansion.

Kakao Group is seeking business models that link issuance and distribution of won-based stablecoins with payments and remittances, as it works in succession with companies at home and abroad including Grab, SCBX, Kyobo Life Insurance and Bonanza Factory. Kakao Pay and Kakao Bank are also working with Fireblocks to build digital asset infrastructure, widening their technology base.

Use cases for blockchain are also expanding in the banking sector. Hana Bank began joint research on travel rule technology with Upbit Global, and issued a $100 million digital bond using Euroclear's blockchain platform. It said this implemented same-day settlement (T+0) for foreign-currency bonds for the first time among domestic financial institutions.

Infrastructure companies are also strengthening global cooperation. DSRV formed a strategic partnership with Alchemy and moved to expand blockchain RPC infrastructure centered on South Korea and Japan. Dunamu held "UIS 2026" and continued discussions among global digital asset companies and policy and technology officials.

Uncertainty remains on the institutional side. The People Power Party said it would re-examine the timing of digital asset taxation scheduled for January 2027, and presented issues such as identifying acquisition costs for overseas exchanges and personal wallets and tax standards for staking and DeFi. With discussions on the U.S. digital asset market structure bill, the Clarity Act, being delayed, there is speculation it could affect the schedule for Korea's Basic Act on Digital Assets.

• Kakao Group expands cooperation on digital asset business with companies at home and abroad including Grab and SCBX • Kakao Pay and Kakao Bank cooperate with Fireblocks on stablecoin infrastructure • Hana Bank joins hands with Upbit Global on joint research into travel rule technology • Hana Bank issues first same-day settlement digital bond in Korea, worth $100 million • DSRV signs strategic partnership with Alchemy • Dunamu holds "UIS 2026," bringing together global digital asset officials • People Power Party to re-examine timing of digital asset taxation, citing abolition of financial investment tax and fairness issues • Delay in U.S. Clarity Act discussion could become a variable for Korea's Basic Act on Digital Assets schedule

Securities firms are accelerating efforts to expand related businesses ahead of the introduction of a regulatory framework for tokenised securities (STO).

The scope of business is expanding, including product development for institutional investors, building issuance and distribution infrastructure, and verification of subscription payment settlement using stablecoins.

As collaboration with global blockchain companies expands, competition among securities firms to pre-empt the STO market is gathering pace.

• KB Securities joins hands with Securitize and Optimism to pursue STO business for institutions • Shinhan Securities joins hands with BlueWard and Lotte Future Strategy Research Institute on a joint STO business • Eugene Investment & Securities verifies stablecoin settlement for STO subscription payments with Bitoz

Regulatory changes around funding, credit provision and market infrastructure are also continuing. With Samsung Securities and Meritz Securities entering the short-term notes market, the number of operators is expanding, while credit provision limits for comprehensive financial investment business operators are being reduced, adjusting standards for fund management and soundness management.

The Korea Exchange is also speeding up market structure reforms. It revised its listing and classification systems by allowing companies delisted for failing to meet market capitalisation requirements to move to KONEX and by introducing its own industry classification system, KRICS. The after-market is also establishing itself as a new trading infrastructure, with daily trading in the 1 trillion won range in its early days.

• Meritz Securities wins approval for short-term notes business, expanding operators to 9 • Samsung and Meritz join in, expanding the short-term notes market • Delisted firms failing market cap requirements get a path to KONEX as exchange revises listing rules • Securities industry tightens control over debt-based investing as credit provision at comprehensive investment firms is cut to 90 percent of equity capital • Exchange to hold "KOSDAQ Day" on the 6th and 7th of next month to share key issues and investment information • Korea Exchange introduces its own industry classification system, KRICS, creating a new mobility sector • One week after after-market launch, daily trading hits 1.1 trillion won with retail share at 90 percent

Ahead of the Chuseok holiday, financial institutions continued holiday responses such as customer service and financial security measures. Toss Bank operated its customer center 24 hours during the holiday period, and the Financial Security Institute activated an emergency response system against cyber attacks. DailyPay expanded early settlement support for small merchants, and Naver Pay strengthened overseas QR payment benefits, in services aimed at holiday demand.

Financial companies carried out holiday sharing activities for vulnerable groups and local communities. KB Securities also delivered holiday food items to households of elderly people living alone.

In the securities sector, a cautious mood emerged around overseas stock marketing unlike in previous years, while the domestic stock market focused on overseas variables around the holiday period such as a U.S.-China summit, U.S. inflation and Micron results.

• "Different from previous years" securities sector ahead of holiday, watching overseas stock marketing • Financial sector steps up Chuseok sharing activities, expanding touchpoints with local communities • Toss Bank keeps customer center running 24 hours during Chuseok holiday • Financial Security Institute activates emergency system against cyber attacks during holiday • DailyPay expands early settlement for small merchants on Kurly ahead of holiday • Naver Pay expands overseas QR payment benefits for Chuseok, offering point accrual in 74 countries • KB Securities delivers holiday food items to households of elderly people living alone for Chuseok • Korean stocks enter Chuseok holiday with eyes on outcome of U.S.-China summit • Stock outlook: KOSPI after holiday focuses on U.S. inflation and Micron results

Other major moves in finance and fintech were also compiled.

KB Financial Group will invest 600 million won to support energy-saving facilities for local small merchants, and KB Kookmin Bank will push cooperation with SAP Korea on embedded finance. KB Securities launched an investment performance analysis service, Kkaebio, on its mobile trading system. Shinhan Bank introduced same-day trading for retirement pension ETFs, and Shinhan Securities upgraded its AI private banker to strengthen services summarising issues on holdings and U.S. disclosures.

• KB Financial to invest 600 million won to support energy-saving facilities for local small merchants • KB Kookmin Bank to cooperate with SAP Korea on embedded finance, expanding corporate finance • KB Securities launches investment performance analysis service Kkaebio on MTS • Shinhan Bank introduces same-day trading for retirement pension ETFs, enabling reinvestment on the day of sale • Shinhan Securities upgrades AI private banker, offering real-time summaries of holding issues and U.S. disclosures

Woori Financial Group will provide 450 billion won in project financing support for the Pohang AI data centre and donated 3 billion won to support social entry for care leavers and isolated youth. Hana Bank held a youth AI game creation contest. IBK Industrial Bank of Korea and Korea Development Bank will form a 120 billion won investment fund for innovative companies. NH Nonghyup Bank expanded financial support for the Jeonnam-Gwangju semiconductor cluster, and Kiwoom Securities moved to build an unlisted stock cross-trading system with Naver Pay.

• Woori Financial to provide 450 billion won in PF financial support for Pohang AI data centre • Woori Financial to donate 3 billion won to support social entry for care leavers and isolated youth • Hana Bank holds youth AI game creation contest with total prize money of 10 million won • IBK Industrial Bank of Korea to form 120 billion won innovation company investment fund with Korea Development Bank • NH Nonghyup Bank expands financial support for building Jeonnam-Gwangju semiconductor cluster • Kiwoom Securities to build unlisted stock cross-trading system with Naver Pay