Three consortiums led by information technology firms applied for a preliminary license to launch South Korea's first Internet-only bank, the financial regulator said Thursday.
The Financial Services Commission (FSC) said the applicants are Kakao Bank, K-Bank and I-Bank and that it will give approval to one or two operators after a months-long review of their qualifications. The watchdog received applications on Wednesday and Thursday.
Led by Kakao Corp., the operator of No. 1 mobile chat application KakaoTalk, Kakao Bank teams up with 11 companies including Kookmin Bank, the third-biggest lender by asset; Netmarble Inc., an online game software provider; eBay Korea Co. and Korea Investment Holdings Co.
K-Bank is initiated by KT Corp., the largest fixed-wire operator. Its partners involve No. 1 bank Woori Bank, leading IT solution provider Nautilus Hyosung Inc., GS Retail Co. and Hyundai Securities Co.
Interpark Corp., an online shopping mall operator, plays a leading role in the I-Bank consortium, along with SK Telecom Co., the largest mobile carrier; GS Home Shopping Inc.; NHN Entertainment Corp. and the Industrial Bank of Korea.
An Internet-only bank, or a direct bank, is a bank that offers financial services online without brick-and-mortar locations. Such banking emerged in the 1990s with the advent of online banking technology.
The FSC has announced a plan to introduce the direct banking business as part of its efforts to deregulate the local financial industry and foster the fast-growing financial technology sector.
Under the FSC plan, Internet-only bank operations will range from deposits, lending and credit cards to foreign exchange transactions, and their financial soundness would be regulated the same way as that of other commercial lenders.
It encouraged an IT firm-led consortium to make a bid for the new banking business in order to attract industrial money to the financial sector.
The regulator is now working on lowering legal entry barriers, including stake ownership limits, which has banned non-financial firms from owning a more than 4 percent stake in a bank. It aims at raising the stake ceiling to about 50 percent.
It has already removed requirements that all banks must have physical offices and face-to-face channels with customers.
The FSC said it will scrutinize all documents submitted by applicants and check related qualifications, including their financial stability, shareholdings structure and customer service plan, before making a final decision. (Yonhap)
