Toss hints at withdrawing bid for internet-only bank
Viva Republica is considering withdrawing its bid to establish the country’s third internet-only bank as well as launching a securities business, company founder and CEO Lee Seung-gun said during a recent press conference. Viva Republica is the operator of mobile wire transfer app Toss.
The company is currently experiencing difficulties in getting approval from the financial authorities for its securities business, and Lee’s remark is regarded as a complaint.
“We have long prepared for launching a securities business. But the financial authorities keep coming up with impossible tasks for us,” Lee said during a media conference at a fintech event in Gangnam-gu, Seoul, Sept. 18.
“We are currently considering withdrawing our bid for the securities business.”
He also hinted that Viva Republica could give up its bid to establish the internet-only bank.
“There is nothing we can do at this point. We did everything, but the Financial Services Commission (FSC) eliminated our first bid in May,” Lee said.
“When we first talked to the FSC, everything seemed to be in the right direction. However, things become tricky every time when we talk to the Financial Supervisory Service (FSS). If there is a protocol we need to satisfy, we will do whatever it takes to meet it. But the FSS keeps talking about regulations that do not exist.”
FSC Chairman Eun Sung-soo participated in the same, and Lee asked him to facilitate communication with FSS Governor Yoon Sukheun. The consortium led by Viva Republica submitted its application to launch the nation’s third internet-only bank in March, but the FSC rejected it due to mounting concerns over the firm’s governance and financing.
Industry insiders said the major reason behind the FSC’s rejection was the exit of Viva’s two strong consortium allies — Shinhan Financial Group and Hyundai Marine & Fire Insurance — shortly after the application was submitted.
Viva became the nation’s first fintech “unicorn” startup valued at more than $1 billion in December, after receiving $80 million in investment from investors including Silicon Valley-based venture capital firms Kleiner Perkins and Ribbit Capital.
Despite massive investments from investors, the firm has suffered growing losses while its business model has yet to suggest longterm growth potential.