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| Seen is the logo of LINE Bank, the internet-only bank that Naver seeks to launch in Japan. / Courtesy of LINE |
Questions are arising over Naver's lukewarm attitude toward the online banking business in Korea, which is in stark contrast to its enthusiasm for operating internet-only banks overseas.
The nation's largest portal has sought to enter the internet banking market in other Asian countries through its subsidiary LINE, a global mobile platform operator based in Japan.
On Wednesday, LINE announced that LINE Bank Preparatory Office, a consortium comprised of LINE Financial Taiwan, Taipei Fubon Bank, CTBC Bank, FarEasTone, Standard Chartered Bank, Taiwan Mobile, and Union Bank of Taiwan was granted an internet banking license by Taiwan's Financial Supervisory Commission.
This was the first time LINE has received approval from a government authority for its online banking business.
"We will continue our plan to introduce banking services involving artificial intelligence, big data, and financial technologies, as we develop secure personal finance experiences that can improve banking for all consumers," the company said in a press release.
LINE also plans to open internet-only banks in Japan, Thailand and Indonesia.
In Japan, it aims to launch its LINE Bank within 2020 in cooperation with Mizuho Bank, the third-largest bank there.
As for Thailand, KASIKORNBANK has joined hands with LINE to establish the KASIKORN LINE internet bank.
In Indonesia, PT Bank KEB Hana Indonesia has partnered with LINE.
Naver's stance on an internet-bank in Korea, however, is totally opposite to its efforts in other countries.
Although the IT giant decided to spin off its Naver Pay division to establish a financial subsidiary named Naver Financial by Nov. 1, it has denied rumors that it will enter the internet banking sector in Korea.
"Although K bank and Kakao Bank have stably run their banking businesses, we are not interested in the banking sector," said Naver Chief Operating Officer Choi In-hyuk, who was appointed the first chief of Naver Financial. "But we may expand our presence in other sectors, such as payment, insurance and loans."
Naver expressed similar sentiments in January when the company announced it would not join the bid for a license to run the nation's third internet-only bank.
"Korea has a well-developed mobile banking environment, and we reached the conclusion that we do not have an advantage over Kakao Bank and K bank," the company said at that time. "We will continue to make efforts to launch internet banks overseas, because foreign countries still have an inefficient financial infrastructure."
Some observers cited the financial regulator's strict regulations as the reason for Naver's reluctance.
"The Naver founder has been pessimistic about entering internet banking business in Korea, due to regulations," said an industry insider who is familiar with this issue.
As the Financial Services Commission (FSC) has begun moving to ease regulations on internet bank operators, however, expectations are also growing that Naver may participate in the forthcoming bid for the third internet-only bank.
On July 24, the FSC allowed Kakao to become the largest shareholder of Kakao Bank, despite allegations that Kakao Chairman Kim Beom-su had violated the Fair Trade Act.
