Innovative Finance No.1 Live M, Decision on Re-designation Amid Labor-Management Conflict Today

Financial Services Commission to Reassess KB Kookmin Bank's Budget Mobile Phone Business

[Asia Economy Reporter Park Sun-mi] The fate of KB Kookmin Bank’s budget phone business ‘Liiv M,’ designated as the first innovative financial service two years ago, will be decided at the Financial Services Commission’s Innovative Finance Review Committee meeting scheduled for the afternoon of the 14th.

Liiv M is a financial-telecommunication convergence service launched by KB Kookmin Bank in December 2019 after being the first in the banking sector to receive approval as an innovative financial service from the Financial Services Commission in April of the same year. On the day marking two years since its designation as an innovative financial service, the Financial Services Commission meeting will decide whether to re-designate the service.

The innovative financial service sandbox system allows financial companies to commercialize innovative services by temporarily exempting related regulations. After the initial selection, regulatory exemptions on business activities are granted for two years, and upon review, an additional two years of exemption can be granted if the service extension is approved. If Liiv M receives re-designation this time, it can continue the service for another two years. If it fails to be re-designated, the business must be discontinued.

KB Kookmin Bank views the extension of the Liiv M business as a win-win for the bank, employees, and customers, and has been exploring various ways to persuade the union opposing the Liiv M business. The bank is concerned that if Liiv M, which has attracted 100,000 subscribers over two years, fails to extend the service due to union opposition, it could lose consumer trust.

The union argues that the suspension of Liiv M, which is moving toward launching consumer-centered pricing plans, should be reconsidered from the customer-centric perspective as to whether it is truly the best choice for customers.

On the other hand, the KB Kookmin Bank union claims that labor-management conflicts have intensified since the budget phone business was designated as the first innovative financial service. They assert that the management has repeatedly pressured performance and encouraged excessive competition while operating the budget phone business.

The day before, the union urged the financial authorities to “judge whether the approval conditions were violated,” stating that despite KB Kookmin Bank violating the approval conditions for the budget phone business, it is pushing ahead with the business extension under the logic that “if the innovative financial service designation is canceled, 100,000 subscribers could be harmed.”

In a press release, the union stated, “While ‘innovation’ is an important criterion in the initial approval process of innovative financial services, in the extension review process for already approved innovative financial services, whether the originally granted ‘approval (additional) conditions’ have been violated should be a more important criterion. Since we submitted a total of 19 pieces of evidence of approval condition violations to the Financial Services Commission earlier this year and requested cancellation of the innovative financial service re-designation, the financial authorities must make a judgment on whether the approval conditions have been violated.”