Kakao Bank, which is preparing to establish its internet-only bank, has decided to provide services through only mobile devices and not PCs. This is the first time in South Korea when a financial company is attempting to provide only mobile banking services and not PC banking services. It is a shocking experience where a financial company is giving up on stores and PC banking services that are familiar to financial consumers.
According to related industries on the 19th, it is confirmed that Kakao Bank recently requested financial authorities for authoritive interpretation on whether or not there will be problems regarding financial transaction acts if it provides internet-only bank services through only mobile devices.
“It is true that Kakao Bank is going to provide its services only through mobile devices.” said a representative for Financial Services Commission (FSC). “Including security and protection problems for consumers, we are currently examining bank laws, electronic financial transaction acts, and electronic financial supervision regulations along with Financial Supervisory Service (FSS).”
“Even if there are parts that are ambiguous, we are going to look at them flexibly even if we have to utilize no-action letter that was emphasized by Chairman Lim Jong-ryong of FSC. “We are going to make sure that there will not be any difficulties with Kakao Bank from providing its differentiated services.”
Financial authorities are welcoming this experience by Kakao Bank since they are expecting services that are different from other internet banking that is provided by large offline banks. They are ready to convert any stances such as easing of regulations if Kakao Bank can provide innovative services that were not available before.
Kakao Bank applied for final authorization in January and is planning to start its internet-only bank services after receiving final authorization sometime in March.
It is heard that Kakao Bank discussed with South Korean Government about grafting financial services using ‘KakaoTalk’ and opened foreign FinTech services. Kakao Bank is planning to introduce wire transfers or payment of utility bills through KakaoTalk, secured loan on lease by receiving documents and borrowing loans through mobile devices, 24-hour consultations through chatbots, and payment of interests on music or emoticons instead of cash.
“However because some workers bringing up issues regarding inconvenience from consumers, we are looking at Kakao Bank’s internet-only bank from every directions.” said a representative for FSS. “For example, some consumers prefer to use PCs since there are limitations with mobile devices in performing complicated financial goods or making reports”
Kakao Bank has emphasized since its establishment that it will be a mobile bank and not an internet-only bank.
“Reason why we are approaching services such as calling, e-mails, messengers, and music more conveniently through new methods is due to mobile devices and not internet or online.” said CEO Yoon Ho-young of Kakao Bank.
If Kakao Bank operates its internet-only bank through only mobile devices, it can be turned away by people from ages between 50 and 60. However it expects that easier and faster services can be provided through KakaoTalk platform rather than PC banking and can go after people from ages between 10 and 40 really fast.
This move is completely opposite from how KBank, which is its competitor, is emphasizing offline marketing channels.
It is heard that KBank will expand its offline marketing channels even more by utilizing 3,000 KT retail stores and 10,000 GS convenience stores.
“We are obeying conditions that are required by financial authorities while final authorization is being evaluated.” said a representative for Kakao Bank. “Global internet-only banks such as Atom Bank from England are going towards ‘mobile only’ channels.” Reason why Kakao Bank has given up on PCs is because it can stand out from its competitors such as KBank through clear differentiation.
Staff Reporter Kim, Jihye | jihye@etnews.com