Launch of KT’s K Bank is put off until March

K bank, Korea’s first internet-only bank, will launch in March, slightly later than expected. The bank said it wanted to fully test its services before the official launch.

K bank, an internet-only bank created by a consortium led by telecommunications provider KT, initially estimated that its services would be available shortly after the Lunar New Year.

This led market insiders to speculate that the official launch would be in late January or early February.

K bank is the first and the only internet bank to obtain final approval for a business license by the Korean government.

The bank received approval in December 2016. Its main competitor, Kakao Bank, an internet bank created by the nation’s largest messenger service Kakao, is still awaiting final approval.

“It is not a postponement,” a spokesperson for K bank told the Korea JoongAng Daily on Tuesday.

“During the briefing after we obtained final approval, we said we estimated our launch date may be late January or late February but no official date was set.”

The bank said it will spend the month beta testing its services for employees of the bank and KT.

“User safety is at the top of our agenda,” said the spokesperson. “If we experience any serious error upon a premature launch, it would inflict harm not only on us and Kakao Bank but also on the fintech industry as whole, which is why we want to double check everything before we put the system out in the market.”

“Initially, the bank was aiming to launch in late January or early February,” said Kim Sung-jin, an official at the bank division of the banking and insurance bureau of the Financial Services Commission.

“The bank’s official position is that it will take more time to conduct an intensive inspection of its systems before it opens its services to consumers.”

“The later the launch date, the more loss the company will incur,” the FSC official said.

“So the bank pushing back its plan can be understood as its willingness to go through a meticulous examination process to better prepare the system and minimize the possibility of any system error. After all, late January or early February was just a plan and nothing more.”

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]