Kakao and KT to start internet banking service

By Park Sae-jin Posted : November 30, 2015, 08:44 Updated : December 3, 2015, 16:43

[Courtesy of Kakao Corp.]



Kakao Corp. and KT Corp. were permitted with preliminary licenses to start web-based banking services, Sunday, the Financial Services Commission (FSC) said.

The internet banking will provide same services as commercial banks, just without offline offices. Consumers can get its full services like getting a loan, depositing money via online.

Kakao, the country’s largest smartphone messaging platform and KT, the second largest mobile carrier are scheduled to deliver public presentations on their internet banking business plans on Monday at the Korea Federation of Banks headquarters in Seoul.

Their final approval is expected to be made at the start of next year. If approved, two consortiums can open the banks online in six months. The Financial Commission requested stricter security measures from both of the consortiums.

Kakao and KT will provide banking service under the government’s pilot program. Kakao gained high scores on its choosing for services based on the phenomenal popularity of its social messaging service “Kakao Talk”. Its users counted, are 40 million.

KT’s “K Bank” also received high scores for it has partners organized with various companies from different fields.

Recently the government had been trying to widen its financial services sector. Already many internet companies are preparing to jump into open web-based banking services once commercialization is done.

But for now, due to regulations, internet banks will have to partner with a licensed bank to launch its services.

Experts of the industry expect internet banking to adapt to the quickly-changing financial environment by processing big data gathered by smartphone usage such as search logs, locations, logs of local services used and so on. Based on the data, “middle-interest loans” are expected to be serviced mainly targeted at small business owners.

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