Toss Bank still inaccessible to foreign customers

Toss Bank CEO Hong Min-taek speaks during an online press conference held to celebrate the bank starting its operation, Tuesday. Courtesy of Toss Bank

Internet-only bank still unclear on how to embrace foreigners

By Park Jae-hyuk

Toss Bank failed to fulfill its previous promise to embrace Korea's residents of foreign nationality, at least in time for the day it kicked off its operations.

“We discovered legal methods for verifying foreign residence cards online, but at this moment, we are unable to open services for foreign customers immediately because we need more preparation time,” Toss Bank CEO Hong Min-taek said in a press conference, Tuesday.

He added that the new online bank is in discussions with the government regarding non-face-to-face authentication of the ID cards, so that it could extend its service to foreign residents “in the near future.” But he did not disclose specific details.

Some industry insiders expect Toss Bank will start offering its services to foreign customers later this year.

When Viva Republica, developer and operator of the Toss mobile money transfer app, received final approval for its banking license from the Financial Services Commission (FSC) in June, it vowed to enable more loans to be extended to the 13 million banking consumers who have been overlooked by other banks, including 2 million foreign residents in Korea.

Foreign nationals in Korea have been blocked from using internet-only banks that lack offline branches because their systems have not been updated to accept foreign residence cards, despite the FSC's revision to its guidelines last year to allow foreign financial consumers to use their residence cards to open bank accounts online.

The current non-face-to-face identification system for financial institutions only accepts residence registration and drivers' licenses of Korean nationals, but not foreign customers' residence cards.

Toss Bank was initially anticipated to address such outstanding issues and roll out its services to foreign customers through an alternative way of authenticating their ID cards, in contrast to its rivals, KakaoBank and K bank.

The nation's third internet-only bank said earlier that it decided to use the immigration service website, HiKorea, when authenticating foreign residence cards, as soon as the bank goes into operation.

“We have already used HiKorea when checking the authenticity of residence cards of foreign users of the Toss app,” a Toss Bank spokesman told The Korea Times in August. “By checking the authenticity manually, we will enable foreign residents to use our banking services, while preventing unregistered ones from opening accounts.”

Separately, Hong also said the bank still has no specific plans for its initial public offering (IPO) because it just went into operation. The bank is currently on track to achieve its goal of raising 1 trillion won ($840 million) in investments over the next five years to satisfy the requirements of financial authorities.

However, he did not rule out the possibility of listing Toss Bank on the stock market in the future. The nation's leading internet-only bank, KakaoBank, went public on the benchmark KOSPI market in August, becoming the country's top financial services company in terms of market cap. K bank is also pushing ahead for an IPO in 2023.

Regarding concerns about the bank's plan to lend more money to borrowers with lower credit ratings amid the tightening lending rules, the Toss Bank CEO said the total size of its non-collateral loans will depend on government policies, as well as market conditions and demand from customers.

“As a commercial bank, we are also subject to the same regulations, so we will comply with policies pursued by the government,” he said.