Korea Investment Holdings, Daum KaKao team up for Internet-only bank

Local brokerage house Korea Investment Holdings Corp. and Daum KaKao Corp., the operator of the country's largest mobile messenger, said Wednesday that they have agreed to form a consortium for the launch of an Internet-only bank.
  
Korea Investment Holdings will hold a 50 percent stake in the consortium, with Daum KaKao owning 10 percent of the entity.

Another tech firm whose name was not revealed, will own 30 percent of the consortium, with the remaining 10 percent to be owned by four commercial lenders such as Hana Bank.
  
In June, South Korea's financial regulator unveiled a set of measures aimed at encouraging big name local IT firms to invest in the Internet-only banking industry with a focus on lowering entry barriers and easing regulations.
  
Under the measures, a non-financial firm will be allowed to hold a 50 percent stake in an Internet bank. Under the current financial laws, a non-financial company is banned from holding more than a 4 percent stake in a bank. All commercial banks are also required to have brick-and-mortar offices and face-to-face channels with customers.
  
But as part of measures to induce IT firms to the sector, the Financial Services Commission (FSC) raised the stake ceiling. The FSC still bans industrial companies affiliated with large business groups from investing in financial entities.
  
Internet-only bank operations range from deposits, lending and cards to foreign exchange transactions, and their financial soundness would be regulated in the same way as that of other commercial lenders.
  
The FSC expects Internet-only banks to be launched in South Korea early next year. The regulator said earlier revisions to the current banking laws will be put forward to the National Assembly in September.
  
The FSC has been moving to lift barriers and obstacles that have hampered the growth of fintech firms and Internet-only banks.
  
Daum KaKao, which operates the country's most popular messenger KakaoTalk, has ramped up efforts to break into FinTech platform business, including its mobile wallet BankWalletKakao.
  
Other brokerage houses such as Kiwoom Securities and Mirae Asset Securities have shown interest in launching an Internet-only bank. (Yonhap)