KakaoTalk has officially operated Kakao Bank

Tinuku ~ Kakao Bank has launched as a virtual bank service. South Korean Internet giant, Kakao Inc. which operates the KakaoTalk application, on Thursday at 7 am officially started operating Kakao Bank into the second online bank launched in South Korea, but quickly met with complaints due to server failure of the mobile app.

Tinuku KakaoTalk has officially operated Kakao Bank

Kakao has launched Kakao Bank as the second virtual bank in South Korea and eight hours after its launch about 230,000 users have downloaded the mobile application and about 103,000 new bank accounts were created. The bank also withdrew 26 billion won (US$23.3 million) in deposits and savings accounts, while extending loans of 14 billion won.

Kakao Bank managed using a mobile platform allows users to make regular deposits with higher interest rates and get loans with lower interest rates than traditional banks.

The service runs on the most popular Kakao Bank messenger app. The bank announced on Sunday that the commission fee for overseas transfers is one-tenth lower than traditional banks. A virtual bank innovation was created to challenge how banks and technologies are put together and work.

Analysts say innovations in the banking industry will be driven by small but agile players in the financial sector. The technology platform laid the foundation for changing the ways in financial services, although the main threat of customers is the connectivity issue.

Kakao Bank CEO, Yun Ho-young, apologized for the server issues that accompanied the first hours of service launch. Kakao Bank in a press conference said the server is currently able to handle a maximum of 100,000 new customers online.

Kakao Bank was founded by a consortium of nine shareholder companies, including Korea Investment Holdings which holds 58 percent of the shares. Kakao Bank obtained approval in April with a capitalization of 300 billion won.

In May, the Korean Bank Federation approved Kakao Bank as the 22nd banking institution and the second bank without a branch office after KT's K bank. But KakaoTalk's very popular service is a solid foundation to seize the market.