The government has begun to select a 'replacement loan (loan exchange) platform' to be launched in October. While about 10 Big Tech and Fin Tech companies such as Kakao, Toss, NHN Payco, Finnq, and Bank Salad have expressed their intention to participate, the government plans to establish a private committee to select platforms fairly.
In the process, many banks protested against the exchange loan system led by Big Tech and declared to build their own platform, signaling another conflict.
Even if the competitiveness of their own platform decreases, it seems to reflect the banks' desperate sense of crisis that they cannot be subordinated to Big Tech as it is.
According to the financial industry on the 4th, the Korea Financial Telecommunications & Clearings Institute (KFTC) started the process of selecting Big Tech platforms to participate in the exchange loan. 9 private committee members gathered to review the platform and select participating companies.
First, 4 members of financial associations and organizations, such as Korea Federation of Banks, The Credit Finance Association, Korea Federation of Savings Banks, and Korea Financial Telecommunications & Clearings Institute, will participate. These were added by 4 people recommended by 4 organizations and 1 person recommended by the Financial Services Commission.
An official from the KFTC said, “Private members are experts who are well versed in the law. We will select companies participating in the exchange loan platform fairly.”
Since it takes about two months to start the platform selection process from this month and build the system, financial authorities plan to proceed without any disruption to the schedule until the launch in October.
Meanwhile, banks have decided to create an independent loan platform, separate from the financial authorities’ building of the exchange loan platform.
Large commercial banks have raised concerns that they could be subordinated to Big Tech and Fin Tech loan platforms, eventually deciding to create and operate their own platform.
It has been confirmed that the five major commercial banks strongly raised the need for a bank-specific exchange loan platform contrasted to local banks or Internet-only banks.
However, it is not yet clear how many banks will participate in the creation of an independent loan-transfer loan platform through the Federation of Banks as the main pillar.
Banks plan to create a loan exchange platform like Account Info, a large public integrated account information management service.
This is because a virtual one-stop loan service can be provided to users while increasing the effect of relatively lowering fees.
An official from a commercial bank said, "Big Tech and Fin Tech that are seeking to participate in the loan exchange platform may offer an unconventional fee-free policy in the beginning, but this will eventually end up subordinating both users and banks to their own platforms. Since it may leave a bad case like food delivery apps, the best choice is to create a platform for banknote readers even if it is slow to activate users.”
Another official said, “It is expected that not many high-credit bank users will switch to another bank using the loan exchange platform. Banks may not welcome this measure since they may lose users to Big Tech and Fin Tech platforms and secure only a few new customers."
The Big Tech and Fin Tech industries expressed their uneasy feelings about banks' independent routes.
A Big Tech official said, "The banking industry is ignoring the government's IT-based exchange loan platform’s aim to enhance the convenience of people, busy filling up their own pockets only. We are skeptical on whether a competitive service platform based on the Federation of Banks will come out.”
By Ji-hye Kim jihye@etnews.com, Ok-jin Bae withok@etnews.com