Taiwan awards first set of virtual bank licenses

Challengers to enter crowded banking market.

Date: August 9, 2019
By: Andrew Silver

Taiwan Taiwanese flag on flagpole textile cloth fabric waving on the top sunrise mist fog

Taiwan has granted its first three virtual banking licenses to consortia backed by investors from Taiwan and Japan, as it looks to speed up innovation in a market resistant to change. Financial experts say that if the challengers can turn a profit while overcoming regulatory and cybersecurity barriers, other traditional brick-and-mortar chains could follow suit in embracing virtual-banking.

The island's Financial Supervisory Commission on July 30 granted licenses to three groups. One is LINE Financial Taiwan, led by Japan's app operator LINE Group and includes Taipei Fubon Commercial Bank, CTBC Bank, Standard Chartered, Union Bank of Taiwan, and Taiwan telecom operator FarEastTone. The second is Next Commercial Bank, led by Taiwan telecom operator Chunghwa Telecom. The third is Rakuten International Commercial Bank, led by Taiwanese IBF Financial Holdings and Japanese e-commerce firm Rakuten Inc.

"One of the biggest advantages of operating an online bank is that operating cost are significantly lower than traditional banks that need to operate branches," a spokesperson for Rakuten, which has been operating online-only Rakuten Bank in Japan since 2010, said.   [FULL  STORY]

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