[Catfish Become KakaoBank]⑤ From Domestic to Overseas... Targeting High-Growth Southeast Asia

Partnership with Southeast Asia's Influential Platform 'Grab'
Equity Investment in Indonesian Digital Bank
Collaboration to Obtain Approval with Major Financial Holding Company in Thailand

Since its launch, KakaoBank, which has experienced rapid growth for seven years, is now expanding its reach beyond the domestic market to target overseas markets. Starting with Southeast Asia, a region with a large population and high growth potential, the bank has set mid- to long-term plans to enter the global market. Traditional banks focus on face-to-face services, so it takes time to enter and settle in overseas markets due to difficulties in recruiting local staff and cultural differences. However, internet banks offer non-face-to-face services, so if they can attract popularity, they can establish themselves in the market quickly.

Last year, KakaoBank made a strategic equity investment in Indonesia’s digital bank, SuperBank. In 2022, it established the digital bank GXS in Singapore, where the largest Southeast Asian application with financial industry experience, Grab, and Singapore Telecommunications (Singtel) consortium are the major shareholders. Indonesia’s leading media company, Emtek, also invested in shares, making it an “anticipated player” attracting attention from various industrial ecosystems, according to industry evaluations.

Grab is a company providing mobility, delivery, and other services in eight Southeast Asian countries. It was known as the “Uber” of Southeast Asia and actually merged with Uber after Uber withdrew from the Southeast Asian market in 2018. Grab manages Uber’s ride-sharing services in Southeast Asia. Recently, it is planning to acquire Gojek, a ride-sharing competitor in Indonesia, significantly increasing its platform influence in Southeast Asia.

The reason Grab, which has ecosystems in various sectors across Southeast Asia, chose KakaoBank as a key partner is because it highly values KakaoBank’s non-face-to-face financial technology and platform capabilities. The two companies plan to build a multifaceted cooperative relationship beyond the launch of SuperBank. KakaoBank’s mobile financial technology capabilities and Grab’s influence in Southeast Asia are expected to create synergy. They are planning to enhance user convenience through service linkage between KakaoBank and Grab and are considering cooperation in business partnerships and technology development.

KakaoBank is paying close attention to Indonesia’s potential. It is the world’s fourth most populous country (270 million people) but has a weak financial industry infrastructure. Specifically, mobile phone penetration, especially smartphone adoption, is well established. On the other hand, about half of the population does not have a bank account, and the country consists of approximately 20,000 islands, which reduces accessibility to banking services. This can be interpreted as a significant opportunity for digital finance to grow.

Besides Indonesia, KakaoBank is also preparing to expand into other Southeast Asian countries. In June last year, KakaoBank signed a business agreement with Thailand’s major financial holding company SCBX to obtain a license for a virtual bank in Thailand. SCBX is a major financial holding company in Thailand that owns Siam Commercial Bank (SCB), one of the top three banks in Thailand, as a subsidiary.

This cooperation follows the announcement by the Bank of Thailand to newly issue licenses for “branchless banks” and digital banks. The two parties plan to collaborate at every stage, from forming a consortium to obtaining approval and preparing for establishment. KakaoBank is expected to acquire more than 20% of the shares in the digital bank consortium to be established later, securing the position of the second-largest shareholder.

A KakaoBank official stated, “KakaoBank is being recognized as a successful model of future banking in the global market, so we will explore various opportunities to secure mid- to long-term growth engines. We will showcase our mobile banking technology to the global market and create the future of finance.”