Digital Banks : Lessons from Korea
Digital banks have been on the rise as digital technologies transform financial services around the world. Under the Korean government’s new policy framework for digital banks, K Bank and Kakao Bank successfully launched in 2017 with convenient and...
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| Format: | Brief |
| Language: | English |
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World Bank, Seoul
2020
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| Online Access: | http://documents.worldbank.org/curated/en/579871603861444098/Digital-Banks-Lessons-from-Korea http://hdl.handle.net/10986/34701 |
| Summary: | Digital banks have been on the rise as
digital technologies transform financial services around the
world. Under the Korean government’s new policy framework
for digital banks, K Bank and Kakao Bank successfully
launched in 2017 with convenient and innovative products and
services and brought a substantial impact on Korea’s banking
sector. With their businesses growing at a fast pace, these
banks sought to increase their capital accordingly, but
encountered unforeseen regulatory issues on bank ownership
which required new legislation and regulatory efforts to get
resolved. After the first three years of operation, as of
July 2020, the two banks show contrasting track records,
mainly explained by differing challenges and successes in
capital increase and marketing. With digital transformation
accelerating and competition heightening, digital banks will
need to become even more strategic and innovative to
continue to be successful. This knowledge note was written
to take stock of Korea’s experience with digital banks and
share lessons that may be useful for financial policymakers
and market players in banking and fintech. |
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