Three consortiums led by Taiwan and Japanese investors are getting the first virtual banking licenses issued by Taiwan’s Financial Service Commission (FSC), Reuters reported on Tuesday (July 30).
One of the three licenses was granted to Rakuten International Commercial Bank, which is operated by Japanese eCommerce firm Rakuten Inc and Taiwan’s IBF Financial Holdings. A license was also granted to LINE Financial Taiwan, led by Japanese app operator LINE Group. A third virtual banking license went to Next Commercial Bank, led by Taiwan telecom operator Chunghwa Telecom.
Granting of the three virtual banking licenses follows moves by regulators in other Asian markets to issue such licenses as internet banks continue to challenge traditional consumer banking, according to the report.
Online banking firms in Asia are not only looking to facilitate competition but also and drive innovation in their markets.
“We’re likely to see these new players in Taiwan focusing on specific markets in need of specialized services and products,” said Fergus Gordon, who leads Accenture’s Banking practice in Asia Pacific and Africa.
Singapore’s central bank said in June it would issue up to five digital bank licenses, and regulators in Thailand and Malaysia are also considering digital banking licenses. Singapore’s central bank said in June it would issue up to five digital bank licenses.
Earlier reports said ride-hailing company Grab was considering applying for a digital license.
The financial services space recognizes the need for innovation, where some 68 percent of banks of all sizes plan to make innovation a priority in the years ahead.
According to reports, small businesses are set to be a major target for online banks as providers seek to roll out foreign exchange, online lending and business payment services.