Securities firms are increasingly entering the foreign exchange market as they have been allowed to conduct general currency exchange services like banks. Originally, currency exchange could only be performed through securities firm accounts for investment purposes, but financial authorities permitted general currency exchange services, allowing foreign currency exchange for overseas travel or study through securities firm accounts.
However, it has been analyzed that banks are already facing fierce competition with 0% currency exchange fees, necessitating differentiated strategies to attract customers.
On the 13th, Mirae Asset Securities announced that it received approval for general currency exchange services from the Ministry of Strategy and Finance. Following Kiwoom Securities and Shinhan Investment & Securities, which obtained approval last year, and Samsung Securities and NH Investment & Securities, which gained approval this year, Mirae Asset Securities has joined the ranks. Korea Investment & Securities is currently reviewing the entry into general currency exchange services.
The general currency exchange services provided by securities firms became possible as the Ministry of Strategy and Finance amended foreign exchange transaction regulations in 2023. As of the 10th, additional amendments to foreign exchange transaction regulations to support general currency exchange services at securities firms have enabled cash exchanges at their counters.
However, the profitability of general currency exchange services is expected to be low, as banks have already significantly reduced their currency exchange fees, leading to fee competition. Recently, Toss Bank has entered the competition with the tagline "0% currency exchange fee," intensifying the competition for "no currency exchange fee" in the domestic foreign exchange market, where fee imposition was previously considered commonplace.
Moreover, users face considerable inconvenience when receiving foreign currency exchanged through securities firm applications. Even if currency exchange is easily performed via a mobile app, receiving the foreign currency requires visiting a branch. While the number of bank branches exceeds 3,000 nationwide, the number of securities firm branches is significantly lower. According to the Korea Financial Investment Association, as of September last year, only 214 domestic operational branches (including branches and sales offices) of the five securities firms granted general currency exchange approval.
Nonetheless, the major securities firms' entry into general currency exchange services is seen as a way to retain their customers amid increasing overseas stock investments, creating a so-called "lock-in" effect. An official from one securities firm noted, "To attract many customers, currency exchange should be handled seamlessly along with investment within the securities firm's app," adding that they have entered the currency exchange market to secure competitiveness as a super app.
Securities firms plan to provide currency exchange services through their own mobile trading systems (MTS) by building the necessary infrastructure within the year.