O-Bank (王道商業銀行) yesterday said that it would be the nation’s first digitally focused retail bank and offer a full array of online services.
The company, which opened its doors yesterday, is to be the new face of Industrial Bank of Taiwan (IBT, 台灣工業銀行), one of the nation’s last industrial banks specializing in direct investments to exit the local market as it began preparing to transform itself into a commercial bank in 2015.
The company aims to carve a place for itself in the nation’s overcrowded banking sector, which is dominated by rivals with larger brick-and-mortar footprints.
Unlike its rivals, O-Bank’s focus on developing its digital channels is unhindered by a need to optimize the utilization of existing physical branches and other real-estate assets, O-Bank chairman Kenneth Lo (駱錦明) said at an opening ceremony in Taipei.
As an industrial bank, regulators had limited IBT to a total of 10 branches, he said, adding that the company has only opened six branches so far.
Designed from the ground up as an Internet bank, the company aims to redefine banking and to pass money saved in rental fees on to its clients, he said.
In place of physical branches, the company plans to build the largest call center in Southeast Asia to handle customer support services, and to provide around-the-clock remote services via video chat software, Lo said.
In addition, by leveraging online tools, the company would be able to provide wealth management services to a wider customer demographic, including younger consumers with lower incomes, Lo said.
O-Bank said that its customers would be able to set up new accounts digitally via its Internet banking Web site or a mobile app to bypass cumbersome paperwork.
The bank’s new products include a debit card offering unlimited shopping rewards, the first of its kind in Taiwan.
IBT posted net income of NT$1.43 billion (US$44.4 million) for the first nine months of last year, representing earnings per share of NT$0.6.
While IBT has played an important role in the nation’s economic growth since its founding in 1999, the industrial bank business model, which is restricted from accepting deposits from clients, proved to no longer be sustainable in the light of the rise of commercial banks.
The company plans to be listed on the local bourse in the second half, Lo said.
However, along with 43 percent of companies listed on the TAIEX, the market value of O-Bank shares is expected to be lower than the minimum face value of NT$10 per share, Taiwan Stock Exchange Corp (TWSE, 台灣證券交易所) chairman Shih Jun-ji (施俊吉) said last month.
Companies are going public to establish public trust, as opposed to raising funds in the current low-growth environment, Shih said.
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