Kakao, KT detail plans for Internet banks
Consortiums led by Kakao and KT, the nation’s second-largest mobile carrier, were awarded preliminary licenses Sunday to start web-based banking services for the first time in Korea, the Financial Services Commission (FSC) said, which will engage in the same business as commercial banks without the need to visit a physical location.
The pillar of the lending services provided by Kakao Bank and KT’s K-Bank will focus on mid-range loans with interest rates within the 10 percent range.
Both Kakao and KT explained that their banks will be able to offer higher interest rates on deposit accounts, lower loan costs and reduced service fees from what they will save in labor and overhead costs that would otherwise be used to maintain a physical bank.
K-Bank said its expansive network and potential user information can be derived from the telecom company and its partner BC Card.
Conversely, Kakao Bank vowed to leverage its KakaoTalk platform by enabling members from group chat rooms to open group bank accounts. The joint accounts can be used when friends need to chip in money for traveling or other events.
Kakao Bank will offer loan services catering to merchants from G-Market and Auction, the e-commerce duo under eBay Korea. The Korean branch of the U.S. e-commerce giant is one of shareholders of the Kakao consortium, along with Kookmin Bank, Tencent, Netmarble and institutions including Korea Post, Seoul Guarantee Insurance and Korea Investment Holdings.
To measure creditworthiness and the amount of loans, the targeted financing option will factor in different sources of information including the sales trend of merchants and the value of inventories, which traditional banks don’t count.
The K-Bank consortium also said Monday that it will rely on big data analysis to generate its own credit-rating system.
Kakao Bank likewise targets tenants looking to make lump-sum payments in the short term for deposits on rental houses.
Financial regulators are expected to issue final approval for Kakao and KT within a month or two.
BY PARK EUN-JEE [email@example.com]