SEOUL, April 9 (Korea Bizwire) — South Korea’s financial regulator said Thursday that Internet-only banks are expected to be launched in South Korea in 2015 as it is working on detailed measures to encourage big name IT firms like Naver and Daum Kakao to invest in the online banking industry.
Under the current financial laws, a non-financial company is banned from holding more than a 4 percent stake in a bank, while all commercial banks are required to have brick-and-mortar offices and face-to-face channels with customers.
But as part of measures to induce IT firms into the sector, the Financial Services Commission (FSC) considers raising the stake ceiling to 30 percent but still bans industrial companies with assets of more than 5 trillion won (US$4.58 billion) from investing in financial entities.
The guidelines under review and to be finalized before June will open doors for IT firms like Naver and Daum Kakao to own an Internet bank.
Online banks will be off limits to conglomerates, including Samsung Electronics and Hyundai Motor, the country’s No. 1 and No. 2 companies, respectively, by market capitalization.
The FSC will also ease real-name financial transaction regulations for online banks as it is impossible for Internet-based banks to identify the real name of an individual who opens an account in person.
It is considering allowing using the public authentication program issued by financial institutions, text messages or telephone calls to identify customers who want to use the banking services, including deposits, loans, payments and fund sales.
The FSC will map out detailed plans and requirements on the establishment of Internet-based banks and authentication procedures around June.
“We will make the detailed plans after public discussions,” said an FSC official, asking for anonymity. “Given all legal procedures, the first Internet bank will likely be launched before the end of this year.”