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Kyobo Life, SBI Holdings, Kiwoon Savings mull internet-only bank

Financial institutions including Kyobo Life Insurance, SBI Holdings and Kiwoom Savings Bank are mulling jumping into South Korea’s internet-only bank business amid the state’s efforts to foster the sector, reports said Wednesday.

The companies attended a briefing session Wednesday, co-hosted by the Financial Services Commission and Financial Supervisory Service to discuss the formation of the country’s third internet-only bank.

The institutions admitted they had been eyeing the possibility of entering the country’s internet-only banking sector for a while, but stressed they had yet to form a consortium. 

Kyobo Life (Yonhap)
Kyobo Life (Yonhap)

“We have decided to attend Wednesday’s briefing session, as it is crucial to always pave new roads,” Kyobo Life spokesperson Song Guk-hyun told The Korea Herald.

“But we are currently at a stage where we are inspecting all possibilities. We have yet to form a consortium with SBI Holdings and Kiwoom Savings Bank, but as we can’t jump into this alone, cooperating with them is a possibility,” he added.

SBI Savings Bank, a Korean subsidiary of the Japanese financial giant SBI Holdings, also acknowledged its parent company’s interest in Korea’s internet-only banking market, though it echoed Kyobo Life’s cautious stance.

“SBI Holdings has been eyeing South Korea’s internet-only banking market, which will be considered as an expansion of its internet banking platform SBI Sumishin Net in Japan,” said a source, who requested anonymity.

“But at the same time, it is taking cautious steps because of the lack of benefits of entering the South Korean market, which is already shared by two major players, K bank and Kakao Bank. On top of that, the online banking platforms of local institutions are already well-equipped and developed, adding to its hesitancy,” the source added.

Despite the government’s push, the reluctance of financial firms to enter the country’s internet-only bank business is shared by others in different industries.

Earlier this week, reports said internet portal giant Naver had notified financial authorities that it would not attend Wednesday’s information session. Its IT peers, such as Interpark and online game developer NHN Entertainment, have already decided to withdraw from the race for internet-only banks.

The relatively low attendance at Wednesday’s briefing was also interpreted as a sign of growing doubts among financial firms. A total of 120 participants from nearly 50 different companies or organizations attended the briefing, whereas the first event held in 2015 attracted 300 people from 90 firms.

Under the Korean banking law, a nonfinancial firm cannot own more than 10 percent of a bank, with voting rights limited to 4 percent. Last year, the National Assembly passed a bill that eased the 4 percent cap to 34 percent for nonfinancial firms.

By Jung Min-kyung (