KOR

Periodicals

OPINION

Korea’s Securities Industry: Changes Resulting from The Pursuit of Large Size and Their Implications
2018 Oct/02
Korea’s Securities Industry: Changes Resulting from The Pursuit of Large Size and Their Implications Oct. 02, 2018 PDF
Summary
The Korean securities industry’s assets totaled KRW 411 trillion early this year, showing a 52.1% increase over the past five years. The primary reason for the industry’s asset increase is large securities firms’ relatively rapid growth compared to smaller securities firms’. Nevertheless, the capital and revenue structures of the large firms are not greatly different from those of small-and medium-sized peers. Due to the early implementation stage of policy measures that incentivize securities firms to grow their size, differences in the revenue structure between the large firms and the small-and medium-sized firms may not be currently visible. But the industry trends in the degree of competition more clearly reflect the impacts of the size growth in securities firms. In most business segments of the securities industry, market concentration began declining shortly before the global financial crisis and turned upward rapidly in 2013. In this situation, it is highly likely that smaller securities firms’ positioning in the industry will become more challenging. Hence, smaller securities firms should come up with specialization strategies to maximize their advantages. For niche markets, it should be considered that small-sized firms could play a role in offering appropriate products to consumers. To encourage sound development of the industry, consideration needs to be given to what should be long-term survival strategies for small securities firms.