Line Sets Sights on Opening Taiwan Internet Bank|LINE成立新公司 純網銀執照"三搶二"

Line is announcing to enter internet banking in Taiwan! To spur the transition of the financial industry, the Financial Supervisory Commission plans to hand out two online banking licenses. Messaging app Line announced on July 26 that it has established Line Financial, to fight with Chunghwa Telecom and Japan's Rakuten for the licenses.


Online banking is super convenient. In April, the Financial Supervisory Commission announced conditions for opening internet banks. Social messaging company Line expressed interest and set up a 100 percent-owned subsidiary in Taiwan, Line Financial, to apply for an internet bank license. Line Bank would be the company's first overseas joint venture bank.

Before a company submits an application, it probably has fewer than 150 people. The majority is probably, as we mentioned earlier, positions required by financial laws or other supervisors.

So-called "internet banks" have a brick-and-mortar headquarters and virtual branches. Accounts are opened online and all services, including account inquiries, statements, transfers, withdrawals, securities, investment services, and issuing of credit cards take place online. The FSC is requiring initial capital of NT$10 billion, which is the same as traditional banks. The financial company has to own at least 50 percent of the bank and there needs to be at least one shareholder with a controlling interest of at least 25 percent. The bank must be managed by the financial company.

We want to open an internet bank as an experiment to see if there is space for such a model in Taiwan, to see if a bank without brick and mortar branches can survive and profit.

The FSC is only issuing two internet bank licenses. Line will be fighting with Waterland Financial Holdings, Rakuten, Mega International Commercial Bank, First Bank and Chunghwa Telecom for the two licenses. The FSC will start reviewing applications in November but no announcement will be made until the end of next May at the earliest.