Naver to form internet-only bank under Line in Japan

A Naver subsidiary will establish an internet-only bank in Japan

Line Financial, Naver’s Tokyo-based mobile messaging subsidiary, formed Line Bank Preparatory Company on Tuesday with the aim of introducing the bank by 2020.

“It is true that the joint venture was launched on Tuesday to prepare for the opening of the mobile-focused banking service by 2020,” said a spokesperson at Naver, “The project will be jointly carried out with Mizuho Financial Group.”

She also confirmed that the joint venture will be 51 percent owned by Line and 49 percent by Mizuho Financial Group.

When the two parties first announced the plan last year, the Japanese financial company highlighted the potential of combining the group’s expertise and Line’s user base.

“By fully utilizing the 78-million-plus monthly active user base and the sophisticated UI/UX of Line and Mizuho’s financial expertise, the new bank, linked to the Line app, will provide smartphone-based banking services, which are easy to use and approachable, therefore making banking service closer to people,” the group said in a statement.

UI is an abbreviation for user interface, while UX stand for user experience.

The move marks the latest in a series of efforts by Line to bolster financial services following the establishment of Line Financial Corporation, a subunit of the messaging app devoted to financial offerings.

The mobile platform now provides investment and insurance services, and is preparing for other financial services, including securities and loan-related offerings.

Naver, Line’s parent, has been keeping its distance from the internet-only bank competition in Korea. It has no plans for an internet-only bank at home, and did not file an application in a recent round of bidding.

In the face of lower-than-expected interest and the failure of applicants to make the final cut in the recent bidding round, the financial authorities and the ruling Democratic Party of Korea held an emergency meeting on Thursday to discuss ways to attract more participants.

Financial Services Commission officials and the party explored the possible easing of regulations concerning the qualifying criteria for the largest shareholder of an internet-only bank.

The law bans a company with a record of financial irregularities.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]