Shinhan Bank, one of the country’s largest commercial banks, is ready to apply for a license that would make it the country’s fourth internet-only bank, joining K Bank, Kakao Bank and Toss Bank in the digital space Start competing.
Shinhan has joined a consortium launched by enterprise resource planning software provider Douzone Bizon to get approval to set up an internet-only bank. Online lenders here offer most financial services, from savings to loans, without physical branches.
The license, tentatively called Douzone Bank Consortium, will be applied for in June or July.
Kospi-listed Douzone Bizon announced on Thursday that it will apply for a license to launch an internet lending company specifically targeting small, medium and micro enterprises. The company said it will provide financing to businesses that have to rely on collateral and guarantees due to insufficient credit rating data.
If Douzone Bank Consortium obtains the license, Shinhan Bank will become the last of the four major commercial banks to invest in an Internet bank. As of the end of 2023, KB Kookmin held 4.88% of Kakao Bank, Hana held 8.99% of Toss Bank, and Woori held 12.6% of K Bank.
Shinhan has maintained a management relationship with Douzone Bizon for many years. In 2021, it acquired a 1.97% stake in the solutions provider under a business agreement. The two parties also established a joint venture, Douzone Techfin, to provide a financing platform for small and medium-sized enterprises.
In July, the Financial Services Regulatory Commission lowered the threshold for pure internet banking operations, declaring that banking would be a contestable market and bidders with “needs and business plans deemed to be stable and viable” could apply for licenses at any time, aiming to end The current oligopoly banking system is dominated by major commercial lenders.
As Douzone Bizon and Shinhan Bank join forces to join the competition, four bidders have officially announced that they will apply for a license to operate South Korea’s fourth pure Internet bank, including Soso Bank, Korea Credit Data Bank and U-Bank.