Shinhan Bank, a prominent player in South Korea’s banking sector, is set to enter the digital arena, vying for a license to become the country’s fourth internet-only bank, according to a Korea Herald report.
The move positions Shinhan to compete with established digital banks such as K bank, Kakao Bank, and Toss Bank. To bolster its bid, Shinhan has aligned itself with Douzone Bizon, an enterprise resource planning software provider, forming the Douzone Bank Consortium.
Douzone Bizon, listed on the Kospi, revealed plans to apply for the license to launch an internet-based lender catering to small and medium-sized enterprises (SMEs) as well as micro-enterprises.
This initiative aims to provide funding opportunities for businesses with limited credit rating data, reducing reliance on collateral and guarantees.
If the Douzone Bank Consortium secures the license, it would mark Shinhan Bank’s foray into internet-only banking, making it the last of the four major commercial banks in South Korea to invest in this sector.
Previously, KB Kookmin, Hana, and Woori had acquired stakes in Kakao Bank, Toss Bank, and K bank, respectively.
Shinhan’s collaboration with Douzone Bizon extends back to 2021, marked by a 1.97 percent stake acquisition by Shinhan in the software provider.
The partnership also gave rise to Douzone Techfin, a joint venture aimed at offering a finance platform for SMEs.
The move comes amidst regulatory changes aimed at fostering competition in the banking industry.
The Financial Services Commission recently announced measures to make the banking market more contestable, aiming to dismantle the oligopolistic dominance of major commercial lenders.
This regulatory shift has spurred interest from various players, including Soso Bank, Korea Credit Data Bank, and U-Bank, who have also expressed intentions to apply for an internet-only banking license.
The Douzone Bank Consortium, including Shinhan Bank, is poised to submit its application for the internet-only banking license between June and July, marking a significant development in South Korea’s financial landscape.
