Rakuten, LINE Group get virtual banking licenses in Taiwan

Institutional Investors • July 30, 2019, 8:30AM EDT
UPDATED: July 30, 2019, 8:38AM EDT
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Taiwan has issued its first virtual banking licenses to three firms, including subsidiaries of Japanese e-commerce giant Rakuten and the country's messaging giant LINE Group.

Specifically, the licenses have been awarded to LINE Financial Taiwan, Rakuten International Commercial Bank, and Next Commercial Bank, which is led by Taiwan telecom operator Chunghwa Telecom, Reuters reported Tuesday.

Taiwan's Financial Supervisory Commission granted these licenses, and the regulator does not plan to issue more virtual bank licenses currently, per the report.

Management consultancy McKinsey recently estimated that if low-cost digital-first banks can scale quickly and take "significant" market share from incumbents, Asian banks' return on equity or RoE could drop to 6.4% in 2023, from 10.1% last year.

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Yogita Khatri profile picture Yogita Khatri

Yogita Khatri is a senior reporter at The Block and the author of The Funding newsletter. As our longest-serving editorial member, Yogita has been instrumental in breaking numerous stories, exclusives and scoops. With over 3,000 articles to her name, Yogita is The Block's most-published and most-read author of all time. Before joining The Block, Yogita wrote for CoinDesk and The Economic Times. You can reach her at [email protected] or follow her latest updates on X at @Yogita_Khatri5.

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