Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
Why is Naver offering banking services outside of Korea?
A mobile phone screen showing Naver's first mobile banking service launched in Thailand via its subsidiary Line this week. / Courtesy of Line
By Kim Bo-eun
By Kim Bo-eun
Attention is focusing again on why the country's IT giant Naver has forgone offering mobile banking services here and has instead ventured out to other markets in Asia, after Naver launched its first mobile banking service via its subsidiary Line in Thailand.
Naver had been expected to launch the third internet bank here, after K Bank and Kakao Bank. Naver's decision not to take part in the race drew surprise, and questions have been raised over why the company has decided to offer mobile banking services outside the country instead.
Locally, Naver has turned to offer financial services via its platform, as the dominant web portal here. In November last year, it set up a separate entity focusing on these services, Naver Financial. As the top portal here, Naver holds immense leverage as a platform given the traffic it is able to generate.
Meanwhile, Naver's Japanese subsidiary Line said it launched its first mobile banking service in Thailand, Tuesday, through a joint venture with a local lender, Kasikornbank. Line's financial services subsidiary Line Financial Asia is also preparing to begin digital bank services in Japan, Taiwan and Indonesia.
Line was established in June 2011, as a mobile messenger service and is currently offering various fintech and artificial intelligence-based services in overseas markets.
Line is the No. 1 mobile messenger in Japan, Thailand and Taiwan. Naver is seen to have determined, therefore, that it has more leverage as a digital bank in the markets of these countries.
This is comparable to Kakao Bank, the leading digital bank here, which has secured over 10 million users in the two years since its launch, due to KakaoTalk, the No. 1 mobile messenger here.
A Line official said "Users of the mobile messenger service will be able to easily access the banking services that are offered, because they will be able to send money to a friend, for example, via the app."
A Naver official said, "Basically, the decision of whether to launch a business or not comes down to whether it will be able to do well or not."
"In Korea, existing players such as Kakao have already built a presence. This is why Naver is looking to other markets through Line. These markets are still underdeveloped in terms of internet banking services," she said.
Korea's first two internet banks ― K bank and Kakao Bank ― were launched in 2017. Kakao Bank has secured a dominant share of the market. Financial services platform Toss is preparing to launch Korea's third digital bank next year. Taking into consideration the market share assumed by existing players, Toss has set up a model focusing on financing for small businesses.
In Thailand, Line's subdiary Line Financial Asia has set up Kasikorn Line, with KasikornBank's subsidiary Kasikorn Vision Company.
Users of Line's messenger app in Thailand are able to sign up for the banking service "Line BK" without having to download additional apps. They can open up to five accounts and sign up for debit cards. Line BK is offering interest rates of up to 1.5 percent for its savings products and is also providing loan services for individuals.
A Line official said the banking service was first launched in Thailand because it did not need to receive a banking license, based on its partnership with Kasikornbank.
In Japan and Taiwan, Line is preparing a different model not in the form of a joint venture with a local entity. Line will launch an internet bank in each country with investments from local financial firms. For Indonesia, Line has partnered with one of the four major Korean banks, Hana Bank, ahead of launching the digital bank.
Local financial firms have become increasingly alert, as the financial services business of big tech firms such as Naver and Kakao, rapidly grow.