Bangkok, Thailand – KakaoBank, South Korea's leading internet-only bank, has successfully obtained a virtual bank license from the Thai government, signaling the return of a Korean-backed financial institution to the Thai market after a 25-year hiatus. This significant development marks a new era for digital finance in Southeast Asia.
On June 19, Thailand's Ministry of Finance officially announced the selection of three consortia as virtual bank operators, including the consortium involving KakaoBank and Thai financial conglomerate SCBX. This decision is the first of its kind since Korean banks withdrew from Thailand following the late 1990s Asian financial crisis. The other two successful applicants are a consortium led by Krungthai Bank (in partnership with AIS and PTT Oil and Retail Business Public Company Limited, OR) and the Ascend Money consortium (a subsidiary of Charoen Pokphand Group and operator of TrueMoney e-wallet service, backed by Ant International).
Thailand's "Virtual Bank" model, introduced by the Bank of Thailand (BOT), mirrors South Korea's internet-only banks, offering financial services exclusively through digital platforms without physical branches. Thailand initially unveiled its "First Virtual Bank Launch Plan" in 2023, aiming to invigorate the digital economy, innovate financial infrastructure, and expand financial access for underserved populations. The BOT emphasized that the primary objective of issuing these licenses is to enhance financial inclusion, particularly for unbanked and underbanked segments, including small and medium-sized enterprises (SMEs) and retail customers. This initiative is also expected to foster healthy competition and financial innovation within the banking sector.
The Thai Ministry of Finance and the BOT received license applications until September last year. Following a rigorous nine-month review process, three consortia, including KakaoBank's, were granted final approval. The KakaoBank consortium received high marks for its extensive experience in digital bank development, advanced technological capabilities, and strong localization potential.
KakaoBank's foray into Thailand follows a strategic partnership established with SCBX in June 2023. SCBX is a prominent Thai financial holding company that oversees approximately 20 financial and non-financial subsidiaries, including Siam Commercial Bank (SCB), one of Thailand's top three banks, Card X (credit card operations), and Innovest X Securities (financial investment services). WeBank Technology Service, a subsidiary of China's first digital bank, WeBank, is participating as a technology partner, providing advanced innovative technology to the consortium.
A preparatory entity for the virtual bank's launch is scheduled to be established in the third quarter of this year. After a roughly one-year preparation period, the virtual bank is expected to commence operations in the latter half of 2026. KakaoBank will take a leading role in planning products and services, as well as developing the mobile application and other information technology (IT) systems. The Korean digital bank will also participate as the second-largest shareholder in the newly formed virtual bank, planning to secure a minimum stake of 20% or more.
Through its expansion into Thailand, KakaoBank aims to strengthen its foothold in the global digital financial market and spearhead the globalization of "K-finance." Yun Ho-young, CEO of KakaoBank, stated, "Acquiring the Thai virtual bank license is a stepping stone for pioneering new markets and a valuable opportunity to showcase the excellence of South Korea's digital financial technology. We will serve as a bridgehead for Korean banks and companies venturing into Thailand."
This move aligns with KakaoBank's broader global expansion strategy, which includes exploring local markets with low risk, fostering joint ventures with global partners, and proactively leading global business based on successful past experiences. In line with this, KakaoBank made a strategic equity investment in Indonesia's digital bank, Superbank, leveraging its partnership with Grab, Southeast Asia's largest super app and IT platform. Superbank has successfully attracted over 3 million customers with its differentiated products and services.
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