[People人] Fintech Industry Stereotype 'Breaker' Challenges Banking... Will It Trigger a Megi Effect?

Lee Seung-geon, CEO of Viva Republica
'Toss' Born After 8 Failures
Toss Bank's Bold Loan Offerings Draw Attention

[Asia Economy Reporter Kiho Sung] From a dentist to a "financial industry disruptor." Viva Republica, the operator of the financial platform Toss, is set to shake up the financial market beyond the simple payment sector. Leading this change is Lee Seung-geon, CEO of Viva Republica. He is the figure who spearheaded breaking the stereotype that platformization of the financial industry is impossible in Korea.

CEO Lee is considered the most "disruptive" figure in the fintech industry. He is the person who broke the perception that using a public certificate was mandatory for online transfers. He also disrupted the framework of simple payments and expanded the scope of online finance to include integrated account inquiry, real estate, and fund investment.

This year, CEO Lee is challenging another "disruptive innovation" in the second half. This will be through Toss Bank, which recently received official approval from the Financial Services Commission. His vision extends to bringing completely different "financial innovation" to consumers through Toss.

A 'Dentist' Far from Online Finance...An Icon of Innovation

Born in 1982, CEO Lee is a dentist by training, far removed from online finance. After graduating from Seoul National University College of Dentistry, he worked as a resident at Samsung Medical Center. He had a secured life with licenses in both Korea and the United States. Leaving behind a stable and rewarding profession, CEO Lee turned his attention to change. He began to show interest in "technology" that could improve more people's lives.

During his three years of public health service, CEO Lee devoted himself to studying programming. Upon discharge, he immediately started a business with a capital of 50 million KRW. This was the birth of Viva Republica in 2011. As the name means "Long live the republic" in Latin, the company adopted innovation services as its corporate motto.

However, business was not as easy as expected. Although they developed mobile-based social networking services and group voting applications, they did not achieve significant results. At a critical moment, CEO Lee chose the path of "disruptive innovation." He tried a different approach from others to find ideas that were completely new but helpful to consumers. He spent entire days observing people at Sinchon, Hongdae, and Garak Market to see what inconveniences consumers faced the most.

After three months, about 100 ideas were generated, and the process of selecting and trying promising ones followed. After failing eight times, the result was Toss. Ultimately, although he started the company to pursue his dream, he realized the importance of creating "services that consumers want."

Third Internet Bank Toss Bank in Spotlight...Intense Competition Expected in the Mid-Interest Market

Toss opened a test website in December 2013 and started open beta service in April the following year. Consumer response was enthusiastic, but another obstacle held them back: financial market "regulations." After shutting down the service within two months, CEO Lee focused on "disruptive innovation" related to regulations. He personally visited government and industry officials to persuade them. As a result, Toss was able to resume its service in 2015.

Currently, Toss has accumulated 20 million registered users. The monthly average users approach 11 million. Over 60% of the users are in their 20s and 30s. Gaining popularity among young users, it created a new expression "Toss hae" ("Do Toss") instead of saying "transfer." Backed by strong capital, Toss's success in a financial sector dominated by traditional giants is exceptional. Last year, Toss expanded into Vietnam with simple remittance and check cards, gaining over 3 million users. In contrast, internet banking pioneers Kakao Bank and K Bank have yet to expand overseas.

The financial sector is paying close attention to CEO Lee's new challenge. This is due to the "catfish effect" (where the entry of a strong competitor raises the competitiveness of existing players) expected from the third internet bank, Toss Bank. The emergence of Toss Bank will inevitably change the existing competitive structure dominated by Kakao Bank and K Bank. Savings banks targeting overlapping customer segments are also closely watching Toss's moves.

In particular, fierce competition is expected in the mid-interest market with other internet banks and competitors. Earlier, the Financial Services Commission ordered internet banks like Kakao Bank and K Bank to lend at least 30% of their total credit loans to mid- and low-credit borrowers. Toss Bank plans to set mid- and low-credit loans at 30% from its first year and expand to over 40% by 2023. This is a more aggressive target than the existing internet banks' goal of around 30%.

To prepare for the competition, Toss is also expanding its scale. According to the financial sector, Toss is expected to close a paid-in capital increase deal soon. Initially planning to raise 200 billion KRW, more than 450 billion KRW?over twice the amount?has been gathered. It is understood that 7 to 8 new domestic and foreign investors have joined.

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