Daum Kakao eyes web-based bank
“We will work with Korea Investment & Securities and apply for [regulatory approval to set up] a web-based bank for October when the applications will be received,” a Daum Kakao spokesman said.
Daum Kakao is expected to control a 10 percent stake in the bank, the maximum allowed for a non-financial firm by law. Korea Investment is expected to take a 50 percent stake, with 30 percent held by another IT firm.
The remaining 10 percent is likely to be held by a commercial lender - Korea Investment and Daum Kakao have already sent out invitations to major banks - and Hana and Shinhan are said to be mulling over taking part in the consortium.
“Web-based banks will bring about great changes in the financial industry,” the Daum Kakao official said. “Daum Kakao, with our strength in mobile platform operations, will contribute to this innovation with optimal standards for a mobile bank.”
Moves by Korea Investment and Daum Kakao are expected to prompt other portal operators and IT firms like NHN, Interpark and KT, who have expressed interest in web-based banks, to forge alliances with financial institutions.
Companies like Mirae Asset Group and Kyobo Life are working to form consortiums to take part in the new internet banking business, according to industry insiders.
Daum Kakao has long been making preparations to enter the new market, setting up a mobile bank task force earlier this year in its bid to establish an internet bank modeled after Alibaba’s Mybank and Tencent’s WeBank.
The idea is not only to offer internet and mobile banking services, but also to provide seamless links with its other mobile platforms, such as messenger Kakao Talk or mobile game platform Anipang.
Interest payments, for instance, could be made in the form of an item or credit from a mobile game.
“In addition to the traditional interest payment, we could offer game money or items like an ‘Anipang Heart’ or ‘Raven Magic Cloak’,” said Yoon Ho-young, an executive at Daum Kakao, at a forum recently.
The Financial Services Commission (FSC) said last month it will allow IT firms and mobile platform operators to take advantage of their existing customer channels to gather clients for internet banking businesses.
This new model, which does away with physical bank branches, is expected to cut costs for banks, which could translate to lower interest rates on loans and higher interest rates on financial products for clients.
Local commercial lenders have in recent years unveiled mobile-based deposit accounts without the physical account books, offering higher interest on their products.
However, the FSC has voiced concerns over existing banks and financial affiliates of chaebol firms becoming active in internet banking, expressing a desire to diversify industry players.
This leaves non-banking financial firms such as Mirae Asset and Korea Investment with better opportunities to broaden their businesses.
“With the internet bank, Korea Investment will turn into a financial holding company with banking businesses under its wing,” said a Korea Investment Holdings official. “We will compete on the same level as financial giants like KB, Shinhan, Hana and Nonghyup.”
KT, another non-financial company with interests in internet banking, is said to be working on a consortium with its own unit BC Card. Its main competitor, SK Telecom, has said it was “mulling over the feasibility [of an internet banking business]”.
“The introduction of internet banks is not merely aimed at making another bank,” said Lee Yoon-su, a senior official at the FSC. “It brings together different industries and enterprises, sparking competition for more innovative financial services.
“This in turn is expected to boost the competitiveness of local financial industry.”
BY PARK JUNG-YOUN [firstname.lastname@example.org]
More in Industry
Move over Federer
Hanjin KAL slams largest shareholder, accusing it of peddling lies
Tech firms brief president on state of AI research
Dongsuh recognizes female authors at Scent of Life Awards