South Korea Embedded Finance Business and Investment Opportunities Databook – 75+ KPIs on Embedded Lending, Insurance, Payment, and Wealth Segments - Q2 2024 Update

South Korea Embedded Finance Business and Investment Opportunities Databook – 75+ KPIs on Embedded Lending, Insurance, Payment, and Wealth Segments - Q2 2024 Update

According to PayNXT360, the embedded finance industry in the country is expected to grow by 21.0% annually to reach US$1,039.2 million in 2024.

The embedded finance industry is expected to grow steadily over the forecast period, recording a CAGR of 35.2% from 2024 to 2029. The country's embedded finance revenues will increase from US$1,039.2 million in 2024 to reach US$4,686.3 million by 2029.

The embedded finance sector in South Korea has not just grown, but experienced a significant surge over the past few months. This growth is driven by the integration of financial services into various digital platforms and the increasing demand for seamless customer experiences. Key sub-segments, including embedded payments and lending, are gaining traction as both businesses and consumers seek more efficient and user-friendly financial solutions.

Embedded finance sector in South Korea is undergoing a rapid transformation, marked by substantial growth over the past few months. Driven by increasing integration of financial services into digital platforms and a rising demand for seamless user experiences, key areas such as embedded payments and lending have seen significant traction. Looking ahead, this upward trajectory is expected to continue, bolstered by technological advancements and supportive government initiatives.
Recent product launches by major players like Naver, KakaoBank, and Toss highlight the sector's focus on user convenience and innovation. Additionally, strategic partnerships and collaborations have played a crucial role in expanding the reach and capabilities of embedded finance solutions, enhancing customer access to integrated financial services.

This momentum is not just expected to continue over the next few months, but is anticipated to accelerate. This acceleration is fueled by ongoing technological advancements and government support for digital finance initiatives. As the market matures, further innovations and partnerships are eagerly anticipated, enhancing the accessibility and functionality of embedded finance across the region.

Product Launches and Innovations

Naver Pay's Expanded Services

Naver, a leading tech company, expanded its Naver Pay platform to offer a wider range of integrated financial services, including payments, loans, and insurance. This expansion allows users to access comprehensive financial solutions directly within the Naver ecosystem, improving convenience and user experience.

KakaoBank's New Features

KakaoBank introduced new features that facilitate embedded lending and investment options. These options enable users to seamlessly apply for loans and invest in financial products without leaving the app.

Toss's Insurance Services

Toss, a prominent fintech in South Korea, launched embedded insurance products that allow users to purchase insurance policies directly through its app, streamlining the process and making it more accessible. These launches reflect the growing trend of integrating financial services into everyday digital platforms, addressing consumer demand for convenience and efficiency in managing financial transactions.

Strategic Partnerships

KakaoPay and Samsung Card Collaboration

In November 2023, KakaoPay teamed up with Samsung Card to integrate KakaoPay's digital wallet services with Samsung Card's credit facilities, providing users with a more seamless payment experience across platforms.

Naver and Toss Partnership

In January 2024, Naver announced a strategic partnership with Toss to embed financial services within its platforms. The partnership focuses on integrating payment and lending solutions directly into Naver's ecosystem, thus enhancing user access to financial products.

Shinhan Bank and Toss Integration

Shinhan Bank partnered with Toss to offer embedded banking services. These allow users to manage banking needs directly through the Toss app, streamlining transactions and improving customer engagement.

These collaborations highlight the growing synergy between digital platforms and financial services, enhancing user experiences and expanding access to embedded finance solutions in South Korea.

Key Mergers and Acquisitions

Naver's Acquisition of Poshmark

In September 2023, Naver acquired Poshmark, a US-based social commerce platform, for $1.2 billion. This acquisition aims to expand Naver's global reach while integrating its embedded finance solutions into Poshmark's platform, improving the user experience for the fashion-focused community.
While detailed information on other mergers and acquisitions is limited, the significant partnerships and product launches highlight the sector's robust growth and innovation.

Regulatory Changes

Open Banking Framework Expansion

The Financial Services Commission (FSC) has expanded its open banking framework, allowing third-party providers to access bank data. This move aims to boost innovation and competition, enabling fintech companies to offer more integrated and user-friendly financial products.

Regulatory Sandbox Initiatives

The FSC has extended its regulatory sandbox, enabling fintech firms to test new products and services in a controlled environment. This promotes innovation while ensuring regulatory compliance.

Consumer Protection Regulations

In response to the growing embedded finance market, the government has introduced consumer protection regulations focusing on transparency and accountability to ensure users are well-informed about the financial products they engage with. These regulatory measures reflect South Korea's commitment to developing a robust fintech ecosystem that fosters innovation while safeguarding consumer interests and ensuring market stability.

The market has also witnessed significant mergers and acquisitions, such as Naver’s acquisition of Poshmark, which are set to further accelerate growth and global expansion. Meanwhile, regulatory developments, including the expansion of the open banking framework and the introduction of consumer protection measures, underscore the government’s commitment to fostering a secure and dynamic fintech ecosystem.
As embedded finance continues to evolve in South Korea, the sector is well-positioned for sustained growth and innovation, setting the stage for a more integrated and user-centric financial landscape in the region.

This report offers a comprehensive, data-centric analysis of the embedded finance industry. It covers lending, insurance, payment, wealth and asset-based finance sectors and provides a detailed breakdown of market opportunities and risks across various sectors. With over 75+ KPIs at the country level, this report ensures a thorough understanding of embedded finance market dynamics, market size, and forecast.

It breaks down market opportunities by type of business model, consumer segment, and distribution model. In addition, it provides detailed information across various segments in each sector of embedded finance. KPI revenue helps in getting an in-depth understanding of end market dynamics.

PayNXT360's research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.

Scope

This report provides in-depth, data-centric analysis of Embedded Finance industry in South Korea. Below is a summary of key market segments:

South Korea Embedded Finance Market Size and Forecast

• Embedded Finance by Key Sectors
Retail
Logistics
Telecommunications
Manufacturing
Consumer Health
Others

• Embedded Finance by Business Model
Platforms
Enabler
Regulatory Entity

• Embedded Finance by Distribution Model
Own Platforms
Third Party Platforms

South Korea Embedded Insurance Market Size and Forecast

• Embedded Insurance by Industry
Embedded Insurance in Consumer Products
Embedded Insurance in Travel & Hospitality
Embedded Insurance in Automotive
Embedded Insurance in Healthcare
Embedded Insurance in Real Estate
Embedded Insurance in Transport & Logistics
Embedded Insurance in Others

• Embedded Insurance by Consumer Segments
B2B
B2C

• Embedded Insurance by Type of Offering
Embedded Insurance in Product Segment
Embedded Insurance in Service Segment

Embedded Insurance by Business Model
Platforms
Enabler
Regulatory Entity

• Embedded Insurance by Distribution Model
Own Platforms
Third Party Platforms

• Embedded Insurance by Distribution Channel
Embedded Sales
Bancassurance
Broker’s/IFA’s
Tied Agents

• Embedded Insurance by Insurance Type
Embedded Insurance in Life Segment
Embedded Insurance in Non-Life Segment

• Embedded Insurance in Non-Life Segment
Motor Vehicle
Fire and Property
Accident and Health
General Liability
Marine, Aviation and other Transport
Other

South Korea Embedded Lending Market Size and Forecast

• Embedded Lending by Consumer Segments
Business Lending
Retail Lending

• Embedded Lending by B2B Sectors
Embedded Lending in Retail & Consumer Goods
Embedded Lending in IT & Software Services
Embedded Lending in Media, Entertainment & Leisure
Embedded Lending in Manufacturing & Distribution
Embedded Lending in Real Estate
Embedded Lending in Other

• Embedded Lending by B2C Sectors
Embedded Lending in Retail Shopping
Embedded Lending in Home Improvement
Embedded Lending in Leisure & Entertainment
Embedded Lending in Healthcare and Wellness
Embedded Lending in Other

• Embedded Lending by Type
BNPL Lending
POS Lending
Personal Loans

• Embedded Lending by Business Model
Platforms
Enabler
Regulatory Entity

• Embedded Lending by Distribution Model
Own Platforms
Third Party Platforms

South Korea Embedded Payment Market Size and Forecast

• Embedded Payment by Consumer Segments
B2B
B2C

• Embedded Payment by End-Use Sector
Embedded Payment in Retail & Consumer Goods
Embedded Payment in Digital Products & Services
Embedded Payment in Utility Bill Payment
Embedded Payment in Travel & Hospitality
Embedded Payment in Leisure & Entertainment
Embedded Payment in Health & Wellness
Embedded Payment in Office Supplies & Equipment
Embedded Payment in Other

• Embedded Payment by Business Model
Platforms
Enabler
Regulatory Entity

• Embedded Payment by Distribution Model
Own Platforms
Third Party Platforms

South Korea Embedded Wealth Management Market Size and Forecast

South Korea Asset Based Finance Management Industry Market Size and Forecast
• Asset Based Finance by Type of Asset
Hard Assets
Soft Assets

• Asset Based Finance by End Users
SME’s
Large Enterprises

Reasons to buy

• In-depth Understanding of Embedded Finance Market Dynamics: Understand market opportunities and key trends along with forecast (2019-2028).

• Insights into Opportunity by end-use sectors – Get market dynamics by end-use sectors to assess emerging opportunity across various end-use sectors.

• Develop Market Specific Strategies: Identify growth segments and target specific opportunities to formulate embedded finance strategy; assess market specific key trends, drivers, and risks in the industry.

• Get Sector Insights: Drawing from proprietary survey results, this report identifies opportunities across embedded lending, embedded insurance, embedded finance, and embedded wealth sectors.