Taipei-The Financial Supervisory Commission has issued its first batch of licenses to three conglomerates for the establishment of Internet-only banks that are expected to officially go online in 2020, FSC Chairman Wellington Koo (???) announced Tuesday.
The three licenses were granted to the preparatory team of Next Bank, in which Chunghwa Telecom holds a 41.9 percent stake; Line Bank, in which Line Financial Taiwan Corp. holds a 49.9 percent stake; and Rakuten International Commercial Bank, in which Waterland Financial Holdings Co. holds a 49 percent stake, while Japanese e-commerce giant Rakuten Group holds a 51 percent stake, according to the FSC.
The FSC had planned to issue just two licenses to run Web-only banks but unexpectedly issued three.
The decision was made based on consideration of different operating models proposed by the three applicants and their different targeted customer groups. The three teams will help boost the convenience of the financial services offered to customers and meet consumer demand, Koo said.
For instance, Line Bank's advantage lies in its solid LINE user base, while Rakuten International Commercial Bank will target white-collar workers aged 30-50 and try to attract heavy smartphone users interested in digital finances, Koo added.
Hong Kong has issued eight licenses to run Web-only banks, while Singapore has announced that it will issue five licenses. South Korea has two such banks and plans to allow applications for further establishment this year. Given the still low market share of Internet-only banks in Japan and South Korea, the impact of such banks on market competition is expected to be limited, hence the FSC decision to issue three licenses, according to Koo.
The FSC announced its plans last year to allow the establishment of Internet-only banks to encourage banks to provide innovative financial services, and started the interview process.
An Internet-only bank -- also known as a virtual bank -- is one that lacks any physical branch locations and exists only on the Internet.
Internet-only banks are accessed via web browsers and mobile apps, providing customers with banking services from any place with access to the Internet.
Source: Focus Taiwan News Channel