Kakao Bank denies opening business to corporations

Kakao Bank, South Korea‘s leading direct bank by transaction volume, denied news reports Monday that it is looking to turn to corporations to diversify its customer group, currently solely composed of retail customers.

Earlier Monday, the online-only bank was reported to have revised its terms and conditions in December to allow for business entities to open checking accounts through its mobile platform, with interest rates settled quarterly.

Kakao Bank said Monday the revision was meant to create accounts for the direct bank‘s internal use.

“(Kakao Bank) is obliged to revise the terms and notify the authorities of the revision, even if the account is for the bank’s internal use,” a spokesperson of Kakao Bank told The Korea Herald. 

Multiple news reports said the move echoed the bank‘s initial plan submitted to the Financial Services Commission to open banking business to small enterprises in Korea in the future. Kakao Bank, however, said detailed plans to do banking business with corporations have yet to be made.

Kakao Bank was launched in July 2017, following the first of its kind K bank in April the same year. As of Sunday, over 5 million users had created accounts with Kakao Bank to the tune of 5.2 trillion won ($4.88 billion) in deposits and savings, as it loaned out 4.8 trillion won.

By Son Ji-hyoung (consnow@heraldcorp.com)