Fintech Competition
Amid intense competition between ICT and financial companies to secure rights to run Internet banks, the nation's big four accounting firms are joining the trend, actively seeking to dominate the new market. Those accounting firms are expected to create new markets in several fields, from accounting and financial consulting to management strategies for Internet banks, the darling of financial technology (fintech). Therefore, they are anticipating that they will be able to secure new sources of revenue.
On Aug. 24, 500V, an alliance of venture firms, announced its intent to create a consortium and apply for permission to run Internet banks. Samjong KPMG was chosen as an accounting and financial advisory firm. The accounting firm signed a Memorandum of Understanding with 500V last May to provide accounting and financial consulting to members of the alliance. 500V is having discussions to attract numerous banks and security companies to the consortium.
Three groups that had already announced the composition of a consortium in order to apply for preliminary approval for Internet banks were found to have recently signed an agreement with a large accounting firm for advisory services. The Kakao Bank consortium consisting of Daum Kakao, Korea Investment Holdings Co., and Kookmin Bank already chose Deloitte Anjin as its accounting and financial advisory firm. The consortium is cited as the most preferred candidate for Internet Banks, and selected one that will be announced at the end of this year. Bain and Company, a global consulting firm, is in charge of management strategy.
The KT consortium made up of KT, Kyobo Life Insurance, and Woori Bank has reportedly decided to get accounting and financial advisory services from Ernst & Young Han Young, and are now looking for a consulting firm related to management strategies after the establishment of Internet banks. Samil PricewaterhouseCoopers (PwC), the nation's largest accounting firm, forged a partnership with an Internet bank consortium composed of Interpark, SK Telecom, and the Industrial Bank of Korea. Many financial companies are reportedly indicating their intention to join the Interpark-led consortium as well.
These accounting firms are giving advice on core content for a business plan, including accounting, security systems, and the management of credit risk for Internet banks. They are providing a full range of support to win the competition, under the circumstances that it is highly likely that financial authorities will first give a preliminary approval to one consortium late this year, after receiving applications for preliminary approval for Internet banks by the end of Sept. Only after getting the go-ahead to set up Internet banks can accounting firms anticipate substantial profits from the establishment of new companies and the construction of IT systems.