Shinhan Bank, Naver could become Korea’s third internet bank

2017.06.13 15:59:34 | 2017.06.14 16:58:21

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Recent movements suggest that South Korea’s top Shinhan Bank and internet company Naver may be teaming up to launch an internet-only bank.

The government recently indicated that it could license a third internet bank after the huge success with the early starters.

According to industry sources on Monday, Korea’s largest commercial bank early this month appointed former Professor Kim Chul-ki of the Korea Banking Institute as its director of the Big Data Center. Kim, a specialist in big data, has over 15 years of experience at Wall Street banks, having worked in Bank of America and Merrill Lynch. In April, global consulting firm Bain & Company’s former head of financial services Cho Young-seo also joined Shinhan Financial Group as the director of the Digital Strategy team. Cho took part in the task force team organized by the Financial Services Commission and the Korean Institute of Finance to set up a roadmap to the launch of the country’s internet-only banks.

Shinhan’s recruitment of fin-tech experts has stoked speculation that it may be gearing up to become Korea’s third online bank, following K Bank and Kakao Bank, currently the country’s only two online banks without brick-and-mortar presence. Shinhan vied for this position in 2015 when participating in the Kakao consortium but had lost to KB Financial Group.

Naver is said to be Shinhan’s most likely partner as the two companies already have extensive partnership in Japan’s financial market. In 2015, Shinhan teamed up with Naver to launch LINE Pay, an easy-to-use mobile payment platform, in the Japanese market. The bank also started LINE Pay ATM currency exchange service, which allows its users to top up the LINE pay in Japanese yen to withdraw money in Korean won from Shinhan ATM machines in Korea.

There have been news reports that financial authorities are considering another go-ahead for additional internet banks, as the country’s first internet-only bank has enjoyed early success since its launch in April. “All options are on the table,” an unnamed officer from Shinhan Bank said.

K Bank has drawn more than expected customers at a fast pace, posing a threat to traditional brick-and-mortar banks. Kakao Bank is readying for its operation this month.

By Chung Ji-sung

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