South Korea’s top financial regulator on Wednesday told tech firms here that their financial services are to operate under and comply with existing financial regulations. The remark came amid concerns of tech giants Naver and Kakao’s fast-growing online and mobile financial services as related regulations on their customer protection and data use remain unclear.

“Big Tech’s foray into the finance sector will be carried out under the same financial regulations and customer protection rules as traditional financial institutions,” Financial Services Commission Chairman Koh Seung-beom said at a meeting that brought together tech, insurance and credit card firms. Naver and Kakao’s fintech units Naver Financial and Kakao Pay were among the attendees.

“As the ‘lock-in effect,’ which is when the user becomes attached to a single platform due to the convenience of connection between different services, could grow and lead to a monopoly of data and biased customer services, the government will strictly monitor such marketing,” he added.

The FSC plans to add clauses bolstering customer protection, including those that will prevent the firms from blaming the customers for losses, to a revision bill for the Electronic Financial Transactions Act.

Koh’s meeting on Wednesday came as traditional financial institutions have been calling out regulators to adopt the same existing regulations for fintech firms.

Authorities, for example, have been cutting traditional issuers’ credit card transaction fees in recent years for the benefit of small and medium-sized businesses and the self-employed. The transaction fee is cut after authorities analyze related data based on the law revised in 2012. Fintech companies, on the other hand, are not required to comply with the same rule and are relatively free in setting the range of the card transaction fee used in their online and mobile platforms. A credit card union of seven local issuers complained last month that “Big Tech firms freely decide on the commission fee without any regulations.”

Experts warn that Big Tech’s fast-dominance over the online finance market requires swift intervention by authorities.

“Big Tech firms have already made significant progress in establishing their place in the financial market, which is why related risks need to be identified and appropriate regulations alongside measures to bring about fair competition in the sector needs to be drawn,” Kim Jabonn, a senior researcher at the think tank Korea Institute for Finance said in a report released last month.

Kim expressed concerns of financial instability, increased risks of cyber security breach and lack of responsibility in e-commerce by shifting the blame towards customers or sellers.

Attracting users with their convenient and round-the-clock services, fintech has been taking over the financial market at a fast pace.

Kakao Pay made its stock market debut last month after spinning off from its parent Kakao Corp. in 2017. It became the country‘s top mobile payment service company with membership of more than 20 million as of end-June. The company offers a range of financial services including mobile payment, remittance, insurance and lending.

Naver Financial was launched in November 2019. Parent firm Naver Corp. said in October that its fintech revenues jumped 38.9 percent on-year to 241.7 billion won in the July-September period. The transaction amount of Naver Pay also jumped 38 percent on-year to 9.8 trillion won in the cited period.