[Column] As Kakao Bank's Status Grows, So Must Its Responsibility

Kakao Bank will join the board of directors of the Korea Federation of Banks as the first internet-only bank. Kakao Bank, which entered the industry in 2017, joining the board after five years is interpreted as a sign that the status of internet-only banks has also risen significantly.

According to the financial sector on the 28th, the Korea Federation of Banks discussed including Kakao Bank as a non-executive director representing the Internet-only Banks Council at the regular board meeting held on the 23rd. The final decision will be made after the general meeting and approval from the Financial Services Commission.

The board of directors of the Korea Federation of Banks consists of 11 members, including Chairman Kim Kwang-soo, heads of six major commercial banks (KB Kookmin, Shinhan, Hana, Woori, SC First, and Korea Citi), heads of three specialized banks (Industrial, Corporate, and NongHyup), and one regional bank head. It operates by selecting representatives from the Commercial Banks Council, Specialized Banks Council, and Regional Banks Council, and now the Internet-only Banks Council will be newly established.

This discussion appears to consider the increase in internet-only banks with Toss Bank joining Kakao Bank and K Bank, and Kakao Bank’s rapid growth over the past five years, which has caused major commercial banks to feel a sense of crisis. Kakao Bank succeeded in its initial public offering (IPO) and recorded a net profit of 204.1 billion KRW last year. It is also expanding its business by launching mortgage loans and preparing for loans to individual business owners. K Bank also achieved its first profitability last year, and Toss Bank, the 'youngest' among them, surpassed 2.35 million users just five months after its launch.

As their status rises, attention that had been focused only on commercial banks is expected to shift to internet-only banks as well. In particular, the financial sector views that internet-only banks will also have to bear the burden of various government policies. Among commercial bank officials, there have been complaints that internet-only banks try to pursue only favorable and beneficial things for themselves.

A representative example was the Moon Jae-in administration’s 'Youth Hope Savings.' Youth Hope Savings was a policy financial product introduced by the government to help young people build assets. It targeted youth aged 19 to 34, offering benefits such as high interest rates and tax exemptions. Although the government supported the budget, this policy financial product paid higher interest than the average loan rate, creating a structure where banks had to bear losses. However, while all major commercial banks participated, the three internet-only banks, whose main customers are in their 20s and 30s, did not, sparking controversy over fairness.

Therefore, when the Yoon Suk-yeol administration’s '100 Million Account' pledge, the 'Youth Long-term Asset Account (tentative name),' is launched next year, attention will naturally focus on whether internet-only banks will participate. It is time for internet-only banks to show responsibility commensurate with their increased status.

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