Financial Services Commission Denies Preliminary Approval to All Four Fourth Internet-Only Bank Consortiums (Comprehensive)

Soso Bank, Soho Bank, Podo Bank, and AMZ Bank
Fail to Secure Preliminary Approval for Internet-Only Banking

The Financial Services Commission announced on the 17th that it held a regular meeting and decided to deny preliminary approval for four internet-only banks: Soso Bank, Soho Bank, Podo Bank, and AMZ Bank.

In March, these four institutions had submitted preliminary approval applications for internet-only banking licenses.

The Financial Services Commission formed an external evaluation committee composed of private sector experts in each field and conducted evaluations from the 10th to the 12th. The evaluation included a document review of the four applicants, as well as presentations and Q&A sessions regarding their business plans. As a result, the external evaluation committee determined that none of the four applicants were suitable to receive preliminary approval for banking operations.

In the case of Soso Bank, while the plan to expand financial opportunities for small business owners was viewed positively, the main shareholder was unclear, and both capital strength and the potential for additional capital contributions were found lacking. Soho Bank was also positively evaluated for expanding financial opportunities for small business owners and for its innovative integration of finance and technology companies, but concerns remained regarding the main shareholder's capital strength, as well as the sustainability and stability of its operations.

Podo Bank was assessed as having an unclear main shareholder, insufficient capital strength, and a low likelihood of additional capital contributions. AMZ Bank similarly lacked a clearly identified main shareholder and was found lacking in capital strength and the potential for further capital contributions.

The external evaluation committee submitted these assessment opinions to the Financial Supervisory Service, which, after considering the committee's views, submitted its own review results to the Financial Services Commission, recommending denial of preliminary approval.

Taking into account the external evaluation committee's opinions and the Financial Supervisory Service's review results, the Financial Services Commission denied preliminary approval for all four applicants during its 16th regular meeting held that day.

A representative from the Financial Services Commission explained, "Going forward, new approvals for internet-only banks will be reviewed comprehensively, considering the competitive environment of the financial market, the status of funding supply to financially marginalized groups, and the likelihood of suitable operators entering the banking industry."

Regarding the prolonged duration of the preliminary review, the representative stated, "Most applicants submitted insufficient materials, so we continuously requested supplementary documents, including business plans. As a result, the review process was delayed compared to the original schedule."

In response to criticism that the denial was due to the project being initiated by the previous administration, the representative said, "It is inappropriate to link the outcome of this preliminary review to the launch of the new administration. The decision was made carefully, based on the external evaluation and the Financial Supervisory Service's review, with a balanced consideration of innovation, competition, and stability in the financial industry."

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