The two consortiums―Kakao Bank and K-Bank, led by mobile messenger creator Kakao and mobile carrier KT respectively―have won the Korean Internet bids.
The two groups said they would be “game changers” in the industry by providing fresh impetus with their innovative capabilities―mobile messengers, telecommunications services, big data analysis on a wide user base―to the “outdated and inefficient” banking industry.
“The members of the Kakao Bank consortium hope to serve as a catalyst to revitalize and change the Korean banking industry,” said Yoon Ho-young, Vice President of Kakao Bank’s Mobile Bank Division, at a press meeting in Seoul on Monday to announce the plans to launch the Internet banks.
He added that the Kakao Bank consortium would be able to provide various benefits for customers, utilizing the allies’ service platforms in different sectors―mobile messenger KakaoTalk which has 38 million subscribers, mobile payment service KakaoPay with 5 million users, e-commerce websites Gmarket and Auction, the nation’s leading music streaming site Melon and online bookstore Yes 24.
Under the current Banking Act, the FSC gave out the preliminary licenses for Internet-only banks on two conditions:
- The two consortiums shall operate banking business in the form of electronic financial transaction business; and
- They shall meet qualifications to run banking business such as manpower, organization and electronic facilities before applying for final licenses.
The final approval will be granted after a review of relevant regulations upon their applications. The two banks―Kakao Bank and K-Bank―shall start business operations no later than six months after they receive the final approval.
Chinese Internet giant Tencent, which currently holds a 4% stake in Kakao Bank, will cooperate with Kakao in banking businesses both in Korea and China. Kakao is also planning to install mobile banking services in a mobile messenger it runs in India.
Unlike other advanced industries like electronics and shipbuilding, the nation’s banking industry has been often considered an underdog compared with those of other economic powerhouses including the US, Hong Kong and the UK.
About Kakao Corp.:
Kakao opens the door to a new world of mobile communication. Kakao’s platform and flagship app is KakaoTalk, which offers free in-app texting and voice calls as well as a platform for a whole world of mobile services that make lives richer and more social. KakaoTalk has over 150 million users worldwide, including 93% of smartphone users in South Korea. In 2013, Kakao generated approximately $200 million in revenue through digital content, gaming, mobile commerce and its marketing channels for brands and celebrities. For more about Kakao, click here.