Rakuten International Commercial Bank Co (樂天國際商銀), a Web-only bank that is expected to begin operations by the end of this year, aims to sign up 500,000 digital savings accounts next year, but it would not launch a price war to attain its goal, chairman Chien Ming-ren (簡明仁) said on Thursday.
If the virtual bank achieves its goal, it is likely to overtake O-Bank Co (王道商業銀行) or Bank SinoPac (永豐銀行), which had 441,945 and 471,689 digital savings accounts respectively as of the end of June, and rank third after Taishin International Bank (台新銀行) with 2.11 million accounts and Cathay United Bank (國泰世華銀行) with 680,330.
Chien said the bank is not aiming for the top ranks, as it does not intend to compete head-on with traditional banks, nor offer higher interest rates on savings accounts.
Photo: Lee Chin-hui, Taipei Times
“It is very easy for traditional banks to boost their digital savings accounts, as they already have millions of customers. They can simply raise the interest rate on digital accounts to more than 1 percent to attract customers,” Chien told reporters on the sidelines of an investors’ conference of IBF Financial Holdings Co (國票金控), which holds a 49 percent stake in the bank.
“That is not something we will do. We will just offer rates that are similar to market rates, and we will focus on attracting clients within the Rakuten ecosystem, including its e-commerce platform,” Chien said.
Chien’s comments suggested a different strategy from that of another virtual bank — Next Bank (將來銀行), with general manager Liu I-cheng (劉奕成) in September saying it plans to catch up with major online banking services, such as Taishin’s Richart service.
Next Bank also plans to begin operations by the end of this year.
Rakuten Bank is waiting for the Financial Supervisory Commission (FSC) to approve its operating license, Chien said.
Once it has obtained a license, the bank would need about one to one-and-a-half months to prepare before commencing operations, as it has to connect its information-flow and fund-flow systems with the central bank, Central Deposit Insurance Corp (中央存保) and other agencies, he said.
The bank plans to first open its business to its employees as a test run, Chien said, adding that it expects its workforce to grow to 160 early next year.
The bank, which is 51 percent owned by Japanese e-commerce company Rakuten Inc, has promised the FSC that it would incorporate Japan-based Rakuten Bank’s information security system, Chien said.
“That would be our advantage over two other virtual banks, as an information system that utilizes artificial intelligence and big data analysis could help prevent hacking and automatically detect abnormal transactions,” he said.
The bank plans to offer deposits, fund transfer, small loan and debit card services in the initial phase and gradually expand into mortgages and corporate loans, he added.
IBF Financial is expected to benefit from the virtual bank unit, as it would increase its maximum leverage ratio and its IBF Securities Co (國票證券) unit would be able to sell its wealth management products through the banking platform, IBF Financial chairman Wea Chi-lin (魏啟林) said on Thursday.
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