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| Toss Bank CEO Hong Min-taek speaks during an online press conference at the Korea Federation of Banks headquarters in Seoul, Wednesday. Courtesy of Toss Bank |
Third internet-only bank vows to embrace foreign customers
By Park Jae-hyuk
Toss Bank got the final approval for its banking license from the Financial Services Commission (FSC), Wednesday, with a plan to start operations in late September, at the earliest.
A subsidiary of Viva Republica, the operator of the Toss mobile money transfer app has now been allowed to become the nation’s third internet-only bank, following K bank, which acquired its banking license in December 2016, and KakaoBank, which won its license in April 2017.
“We will become known as the customer-oriented bank, so that we are the first to come to the minds of customers when they think about a bank,” Toss Bank CEO Hong Min-taek said during a press conference following the approval.
He vowed to do his best to enable more loans to be extended to the 13 million consumers who have been marginalized by other banks, such as: those with lower credit scores, those with fewer financial transactions and credit histories, small business owners and Korea’s residents of foreign nationalities.
FSC Chairman Eun Sung-soo asked the bank to set up a tight financial security system to protect customers and to utilize its data and fintech technologies for more inclusive finance, particularly to offer loans to those with lower credit scores.
“Amid the high demand for safe, convenient and innovative digital financing, due to the Fourth Industrial Revolution and the COVID-19 pandemic, I expect the new internet-only bank to contribute to widening consumer choices, as well as to accelerating competition and innovation in the financial industry,” he said, after giving Toss Bank the approval during the FSC’s regular meeting.
The regulator also demanded that the company fulfill its promise to increase its capital by 2025. It had 250 billion won ($224 million) in capital as of May 31.
The largest shareholder of Toss Bank is Viva Republica, with a 34-percent stake.
Other major shareholders include: Hana Bank, Hanwha Investment & Securities, E-Land, the Korea Federation of SMEs and Standard Chartered Bank Korea.
Once the new bank starts operations during the second half of this year, competition is expected to intensify with the other two internet-only banks, which have gone all out recently to expand their presence by aggressively attracting customers via increased lending to those with lower credit scores.
Toss Bank’s CEO, however, said that its rivals are all of the banks in the market, including conventional ones.
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