Toss Bank Launch Imminent... The 'Three Kingdoms' of Internet Banks Are Coming

Final Approval Application Imminent... If Approved in March, Full-Scale Operations Begin in July

[Asia Economy Reporter Sung Kiho] Toss Bank, Toss's internet-only bank, is on the verge of applying for final approval. If Toss Bank receives approval in March, it will commence full-scale operations in July. Accordingly, the domestic internet-only banking sector is expected to enter a 'Three Kingdoms era' from the second half of the year, reorganizing into a three-company system consisting of Kakao Bank, K Bank, and Toss Bank.

According to financial circles on the 31st, Toss Bank (Toss Innovation Preparation Corporation) is scheduled to soon apply to the Financial Services Commission for final approval as an internet-only bank. If it receives approval as targeted in March, it will launch in July.

Once Toss Bank begins operations in the second half of the year, the internet banking market will be reorganized into a 'Three Kingdoms' structure. These companies are preparing in advance by recruiting personnel ahead of competition. Toss has planned to hire 330 employees by March, while Kakao Bank is on the verge of surpassing 1,000 employees. K Bank is also continuing to recruit related personnel.

Notably, as a condition for talent acquisition, Toss has offered up to 1.5 times the annual salary for full-time employees across all job categories. The compensation policy, which included stock options valued at 1 billion KRW, will be maintained until March. As of the end of 2020, the number of employees across the five Toss companies was 780, nearly 12 times more than five years ago.

With the launch of Toss Bank, internet-only banks are expected to enter full-scale competition in 'mid-interest rate credit loans.'

Kakao Bank is accelerating the release of products available to middle and low credit borrowers in addition to the currently implemented Saetdol loans and private mid-credit loans. K Bank also plans to launch new products soon following a change in leadership. Toss Bank announced during its preliminary approval phase that it plans to offer customized services for individual customers with mid-credit ratings and small business owners.

Accordingly, there is growing interest in whether internet-only banks will bring changes to the loan market with new business models. Until now, the mid-interest loan market has been concentrated among savings banks and credit card companies.

However, challenges are also expected. Although internet-only banks will enter a full-fledged competitive system, the financial environment is not favorable for generating profits. Due to the Financial Supervisory Service's tightening of credit loans, the profits of internet-only banks are already decreasing. Therefore, industry attention is focused on whether the newly launched Toss Bank will become a 'catalyst' that brings new vitality to the market.

This content was produced with the assistance of AI translation services.