Although the approval is delayed... Toss Bank's launch in September becomes more likely

Industry Evaluated as Having No Major Issues

[Asia Economy Reporter Sung Ki-ho] The launch of Toss Bank, aiming to become the third internet-only bank, is expected to be delayed as the financial authorities' final approval review is taking longer than anticipated. However, since there are no major issues with the review itself, it is anticipated to set sail around September.

According to the financial sector on the 27th, the agenda for Toss Bank's final approval was not submitted at the Financial Services Commission's regular meeting held the previous day. As a result, the final approval review for Toss Bank has been at a standstill for four months since the application was submitted on February 5. Compared to Kakao Bank or K Bank, the schedule is delayed by more than a month. Initially, the financial sector expected the final approval to be granted at the regular meeting held this month.

However, since the Financial Supervisory Service has not completed the final approval review for Toss Bank, the submission to the Financial Services Commission's regular meeting has naturally been postponed to next month. The Financial Services Commission's regular meetings are usually held on the second and fourth Wednesdays of each month.

Although the process is delayed, the market evaluation is that there are no major problems with the final approval review. It is analyzed that because Toss Bank is launching based on a fintech company, unlike existing internet banks, there are more situations to review. Additionally, it is known that the recent consecutive COVID-19 cases within the Financial Supervisory Service also had an impact.

If the final approval is granted next month, it usually takes about 3 to 4 months for business preparation, including system integration with external related organizations, so the launch is expected to be possible at the earliest in September this year.

The industry also views Toss Bank's final approval as a matter of time. An industry insider said, "Toss Bank is also included in the plan announced by the authorities today to expand internet-only banks for medium- and low-credit borrowers," adding, "It is known that there were no major issues during the review process, and if the final approval decision was not imminent, it would not have been included in the authorities' measures." In fact, unlike other internet banks, Toss Bank set a target for the proportion of loans to medium- and low-credit borrowers at 34.9% from its first year of operation. This contrasts with Kakao Bank and K Bank, which aim for over 30% by the end of 2023.

Meanwhile, separate from the review delay, Toss Bank is focusing on intensive recruitment. It has secured a large number of internet bank specialists, including developers, data scientists, compliance officers, network security technicians, anti-money laundering personnel, and consumer protection officers.