[Digital Today reporter Sangyup Oh] South Korea's financial investment industry is expanding cooperation with Japanese financial companies. Brokerages, digital asset companies and related institutions have moved to acquire local Japanese financial companies or enter business partnerships one after another.

Mirae Asset Securities on Oct. 28 held a board meeting and decided to acquire 100 percent of Sanko Securities, a unit of Japan's Okasan Securities Group, for about 47.6 billion won. It will proceed with the acquisition through its U.S. subsidiary and plans to invest a total of 12 billion yen, about 100.6 billion won, to expand local operations.

Sanko Securities is a brokerage in Japan that trades stocks and bonds with its own capital. Mirae Asset Securities plans to secure a local securities business license through the acquisition, strengthen its existing proprietary trading business and then expand into retail services for individual investors. It will also discuss ways to cooperate with Okasan Securities Group, including financial product sales.

Hanwha Investment & Securities also signed a share purchase agreement on Oct. 12 to acquire the securities business of Japanese full-service financial investment firm GI Capital Management. The strategy is to strengthen its Asian financial network by securing a base in Japan, following Vietnam, Singapore and Indonesia.

Hanwha Investment & Securities plans to expand its traditional financial business using GI Capital Management's network of local institutional investors and to seek opportunities for new businesses such as digital assets.

Moves are also emerging to directly partner with Japanese financial companies to expand business targeting institutional investors.

Shinhan Investment Corp met executives of Japan's Mizuho Securities and Rakuten Securities in September to discuss business cooperation. Shinhan Investment Corp CEO Seon-hoon Lee (이선훈) separately met Mizuho Securities President Yoshiro Hamamoto (하마모토 요시로) and Rakuten Securities President Yuji Kusunoki (구스노키 유지) to check the potential for cooperation in the financial markets of the two countries.

In particular, it agreed with Mizuho Securities to expand business targeting institutional investors by leveraging research capabilities. The idea is to introduce Korean and Japanese companies to overseas institutional investors and provide investment opportunities through the 'Mizuho Investment Conference', Japan's major global institutional investor event.

Such cooperation is linked not only to South Korean brokerages expanding into Japan but also to Japanese institutional investors increasing investment in South Korea's capital markets. That is because combining Japanese financial companies' client networks with South Korean brokerages' corporate analysis capabilities can connect investment demand between the two countries.

Cooperation is also taking shape in the digital asset sector. South Korean blockchain infrastructure company DSRV last month signed a memorandum of understanding with NICE Information & Telecommunication and SBI Digitrust of Japan's SBI Group to verify a Korea-Japan remittance and payment model using stablecoins.

The three will verify a structure in which Japanese users pay via QR codes at merchants in South Korea and settle payments using stablecoins. They plan to review technical feasibility and business viability through the end of December and decide whether to commercialise it.

Financial investment-related institutions are also expanding exchanges with Japan.

Korea Capital Market Institute on Oct. 28 signed an MOU with the Japan Securities Research Institute in Tokyo. The two institutions agreed to exchange information on financial and capital market systems and laws, and to pursue regular researcher exchanges and joint seminars.

The Korea Financial Investment Association also signed an MOU with the Investment Trusts Association, Japan on Oct. 7 local time on the sidelines of the International Investment Funds Association annual general meeting held in Toronto, Canada. The two institutions will share information on the asset management market and related systems and promote personnel exchanges and joint seminars.

Cooperation is also continuing in financial security. The Financial Security Institute has been exchanging cyber threat information based on agreements signed in 2022 with Japan's Financial Services Information Sharing and Analysis Center and the U.S. Financial Services Information Sharing and Analysis Center.

It was also reported that it shared related information with the Japanese side on recent hacking and data leak incidents and security vulnerabilities in South Korea's financial sector.

Behind the active exchanges between the two countries' financial industries are changes in Japan's financial market and investment demand for South Korea's capital market.

The Japanese government has been expanding the new Nippon Individual Savings Account tax exemption programme since 2024 to encourage individual investors to invest in stocks and funds. As household funds that had stayed in deposits and cash for long periods move to the investment market, new business opportunities are also emerging for overseas financial companies.

South Korean brokerages are acquiring local securities firms or teaming up with Japanese financial companies to secure product sales networks and institutional investor networks in line with these market changes.

Conversely, Japanese financial companies need to provide information on South Korean companies and markets to clients seeking to invest in key industries such as semiconductors and artificial intelligence.

Japan is also pushing to overhaul systems related to financial investment products and digital assets, expanding areas where financial companies in both countries can cooperate.

An official in the financial investment industry said interest in Japan's financial market is expanding beyond overseas stock brokerage to local financial business, institutional investment and digital assets. The official said it remains to be seen whether cooperation between the two countries will lead to actual investment attraction, financial product sales and new businesses.