South Korea's online investment-linked finance industry, often called OnTu, is using the parliamentary audit as an opportunity to stress fair competition principles and responsibility as large financial platforms enter the market. It said expansion by big firms does not necessarily translate into increased funding for mid- to low-credit borrowers. The industry called for an environment that allows existing operators to compete fairly based on accumulated technology and investment performance.

The Online Investment-Linked Finance Association said on Tuesday that institutional standards are needed to support financial consumer protection and fair competition in connection with large platforms entering the OnTu business.

The association stressed that the OnTu business is a market that has grown over the past more than 10 years through investment and technology development by fintech startups and the accumulation of credit evaluation capabilities. It said the sector has identified financial demand from mid- to low-credit borrowers that the traditional financial industry did not sufficiently address and has created new funding channels through linked investments with financial institutions.

It said entry by large operators or expansion of business scale does not necessarily lead to an actual increase in funding for mid- to low-credit borrowers. It said an institutional environment is needed to strengthen the funding supply base, including not only the inflow of new operators but also expanded linked investments by existing OnTu companies with financial institutions.

It also said conflicts of interest need to be managed for operators that simultaneously broker loans and directly supply products. It said principles are needed to protect consumers' choice and market fairness, considering the possibility that influential platforms could prioritize exposure of their own products or use competitors' information.

Hong Jae-moon (홍재문), chairman of the Online Investment-Linked Finance Association, said, "New industries grow on the investments and technology development of companies that challenged first, and efforts to build an institutional foundation." He said, "What matters is not only protecting those achievements, but creating an environment where more companies can compete fairly and take on the next innovation."