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FSC grants banking license to LINE Bank Taiwan Limited

The Financial Supervisory Commission (FSC) granted a banking license to LINE Bank Taiwan Limited (LINE Bank) on 4 February 2021. LINE Bank is the second internet-only bank to obtain a banking license in Taiwan.
Approval to establish LINE Bank had been granted by FSC on 2 August 2019, and after nearly a year of preparation a banking license application was submitted to the FSC, which recently completed all off-site assessment and on-site application review procedures and then issued the banking license.
The internet-only bank is a new type of business model in the banking industry. Besides taking care to exercise effective internal audit and control systems, just as physical banks do, internet-only banks also need to form a good corporate culture, implement corporate governance and consumer protection, and put effort into reputation management so as to build a good industry reputation and win customer trust. 
Since internet-only banks are usually co-founded through cross-sector collaboration among firms active in such areas as financial technology, e-commerce, or telecommunications, they must therefore strengthen business liaison and implement rigorous controls when cooperating with affiliated companies or other enterprises outside their own corporate group.
Furthermore, they need to build accountability systems and require their partners to maintain the same level of legal compliance, information security, and customer data protection that are required of all licensed financial institutions.
After these new market participants open for business, the FSC will collaborate closely with the Central Bank and Central Deposit Insurance Corporation to strengthen supervision of various aspects of the operational risk management framework of internet-only banks, including liquidity risk monitoring, credit risk management, reputation risk management, and cyber security risk control. Internet-only banks will also be required to implement sound corporate governance and consumer protection, as well as to maintain reasonable market competition behavior. The FSC hopes that after it opens, LINE Bank will act in the spirit of responsible innovation to spur innovation in the market and development of the banking industry, and achieve financial inclusion.
Visitor: 484   Update: 2021-02-24