LG and KB formed an electronic-financial digital alliance. Their first task is to establish blockchain-based service infrastructures. Starting with ‘Magok Pay’, they are going to create actual blockchain examples that converge digital products and services.
LG Group and KB Financial Group made establishment of an alliance based on new digital technologies such as Blockchain and AI (Artificial Intelligence) official at LG Science Park. Chairman Yoon Jong-kyu of KB Financial Group, Vice-Chairman Kwon Young-soo of LG Corporation, and other representatives were in attendance at this meeting between two groups. (Reference: The Electronic Times issued on the 17th of December)
They are going to push for consortiums with different types of businesses such as distribution and entertainment by setting up a separate task force and work on establishing a new digital ecosystem.
First, they are going to design blockchain-based service infrastructures.
LG CNS recently started a pilot project for Magok Pay within LG Science Park. It is planning on signing a contract with KB Bank that will become Magok Pay’s payment operator. LG CNS is trying to verify blockchain-based electronic currency business through Magok Pay and it is planning to expand Magok Pay nationally once it is done with a pilot project.
Magok Pay is a payment project based on cryptocurrency. It allows people within LG Science Park to use tokens rather than cash or credit cards at restaurants. One can charge electronic currency through a mobile application and he or she can use it at a franchise store. LG CNS is hoping to commercialize Magok Pay sometime during the first quarter of this year.
If Magok Pay is established as a separate blockchain platform, it is possible for LG Group to create various business portfolios by linking Magok Pay to LG Pay and others. LG Group will gain more competitive edge if Magok Pay is linked to local currency-based simple payments that are being pushed by local governments or Smart City projects. LG Group and KB Financial Group have worked together since last October to materialize joint models and have come up with different projects such as payment, automated insurance compensation, and platform.
There is a high chance that LG Group will push blockchain infrastructure business as its future business. However, it is heard that LG Group will not focus on cryptocurrency-based blockchain business due to severe price variability.
LG Group and KB Financial Group will also work together for digital sectors.
KB Financial Group has been operating a research lab that is composed of employees from its banks, securities companies, property insurance companies, and data system companies. It is likely that it will look at various businesses with LG Group through its comprehensive R&D center, which is the first within financial industry.
LG Group can also utilize KB Financial Group’s data and financial infrastructures and conveniently verify technologies necessary for its businesses.
“Our first plan with LG Group is to expand Magok Pay platform nationally and to enter local currency market.” said a representative for KB Financial Group. “We will also introduce business models based on other technologies such as IoT (Internet of Things) and others besides blockchain.”
Staff Reporter Gil, Jaeshik | osolgil@etnews.com & Staff Reporter Lee, Youngho | youngtiger@etnews.com