KakaoBank CEO Yun Ho-young (left) and SCBX CEO Arthid Nanthawithaya pose for a photo after signing a memorandum of understanding to jointly pursue a virtual banking license at the SCBX headquarters in Bangkok. (KakaoBank)
KakaoBank, South Korea’s largest internet bank, is seeking to secure a virtual banking license in Thailand by partnering with a leading financial group in the country, making its first move after announcing its business expansion plan into southern economies – East Asia.
The Korean digital lender announced on Friday that it has signed a memorandum of understanding with SCBX, Thailand’s financial technology group, to obtain a license to operate a digital banking platform from Thailand’s central bank.
The term “virtual bank” in Thailand refers to a branchless and digitized bank, similar to Internet-only banks in Korea.
“We are delighted to introduce KakaoBank’s mobile banking experience to the global market. Together with SCBX, KakaoBank is committed to shaping the future of finance and contributing to the advancement of financial technology in Thailand,” said Yun Ho-young, CEO of Kakao Bank. .
“This strategic partnership will create opportunities for Thai customers, especially the underserved, to conveniently access a broad range of financial products and services with greater accessibility through technology,” added Arthid Nanthawithaya, CEO of SCBX.
SCBX, a major financial holding company, comprises Siam Commercial Bank (a major commercial bank in Thailand), Card X (a credit card services company), InnovestX Securities (a financial and investment services company), among others.
The memorandum was signed after Thailand’s central bank released a consultation paper in January on the licensing framework to allow digital banks to compete in the market.
According to the framework, the Bank of Thailand aims to accept applications for internet banking licenses and grant licenses to up to three companies by 2024. These licensed companies will be the first digital banks in the country and will be able to start operations in Thailand by the end of June 2025.
As an initial joint project of the two companies, KakaoBank and SCBX will form a consortium of virtual banks to acquire an Internet-only banking license. KakaoBank aims to acquire a minimum of 20 percent of the shares, after its formation.
If the consortium successfully acquires the license, KakaoBank will be the first of three Internet-only Korean banks – KakaoBank, K bank and Toss Bank – to venture into international expansion, as none of them have expanded outside of Korea, so distant.
The memorandum is part of KakaoBank’s global expansion strategy, which it has been driving forward since its initial public offering in 2021. KakaoBank CEO Yun, who spearheaded the creation of the internet-only bank within IT giant Kakao, said the desire to expand the bank services beyond Korea at the time.
A portion of the funds raised by the IPO, about 50 billion won ($39.14 million), was earmarked for entering overseas markets.
After securing his fourth two-year term in March, Yun also announced that KakaoBank is actively reviewing global expansion, particularly targeting the Southeast Asian market.
“We are currently engaged in discussions with two Southeast Asian countries. We expect to be able to announce concrete progress from one of these discussions by the end of this year,” Yun said at a press conference in Seoul in April.
In addition to Thailand, insiders see Indonesia as a very promising candidate for KakaoBank’s global expansion.
By Song Seung-hyun (email@example.com)
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