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| KakaoBank CEO Yoon Ho-young speaks during a press conference held on July 20 at Conrad Seoul on Yeouido, Seoul. Yonhap |
By Anna J. Park
KakaoBank is taking gradual steps to diversify its revenue channels by focusing on overseas markets, especially in Southeast Asia.
According to a recent report published by S&P Global Market Intelligence, the internet-only bank could be able to tap into millions of international users of Kakao's widely used mobile messaging app beyond its home market. The report particularly mentioned Thailand and Indonesia as potentially viable markets.
"KakaoBank could target Thailand and Indonesia in its international plans, as these fast-growing economies are already the largest overseas markets for Kakao Corp.'s instant messaging platform, KakaoTalk," the S&P report stated. "Southeast Asia could be an appealing destination for KakaoBank, given the growth prospects of the region."
Based on the bank's IPO back in August ― through which the firm raised $2.2 billion ― KakaoBank is known to have ample cash resources available to fine-tune its overseas business plans. KakaoBank plans to seek strategic growth in the Asian region in the longer term, after consolidating its retail position in the domestic market. Once the bank starts to advance overseas, it is expected to establish a regional joint venture.
The report also forecasts that part of the raised capital could be used in the acquisition of fintech companies, citing the bank's prospectus written for its IPO in the summer.
"A combination of finance and big-tech, such as KakaoBank, could be an appealing partner for companies in Asia," the bank's spokesperson said, Thursday.
By the first half of this year, the number of KakaoBank customers reached 16.7 million, a 34 percent increase from the end of 2019. The bank also succeeded in generating a net profit within two years of its 2017 launch.
This performance was largely attributed to KakaoTalk's ubiquity among consumers; about 90 percent of Koreans use the mobile instant messenger. Following improvements in the local market, KakaoBank's international expansion into other countries is somewhat inevitable, given similar cases of other big-tech financial firms.
Naver's messaging subsidiary Line, a popular messaging service in Japan and countries in Southeast Asia, established a digital bank operating in Thailand and Indonesia.
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