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Internet Banking to Make Korean Debut In July

Major Korean banks are expected to offer online banking services through the Internet starting in July at the earliest, according to industry sources.

The sources said that a total of nine domestic commercial banks, including Shinhan Bank, KorAm Bank, Housing & Commercial Bank, Kookmin Bank, Hana Bank and Industrial Bank of Korea, would participate in a joint Internet banking system built by Korea Telecom.

Korea Telecom, the nation's largest telecommunications network, has just completed an Internet-based banking system that is accessible through www.banktown.com. The participating banks have requested security approval from the Financial Supervisory Commission, the bank watchdog body.

After two to three months of test operation of the system, the Internet banking service will be offered to users around the beginning of July, the sources said.

In addition, ten other local banks such as Korea Exchange Bank and Seoul Bank will also participate in the online banking system soon after the test operation by the first group of banks turns out to be successful.

It was learned that the Korean banks have decided to launch their Internet banking services jointly through an Internet banking system in order to cope effectively with the possible security problems.

Industry observers say that the key to success in Internet banking service depends on how well the security problem will be solved.

In order to prevent a possible leakage of customer information, Korea Telecom and the nine participating banks will continue to make up for the weaknesses found under in the current banking system. So, the banks plan to test the system several times prior to the normal operation scheduled in July.

"International companies enjoying successful business recently are, in most cases, those who are running ahead of their rivals especially in information technology field," said Shin Dong-Hyuck, chairman of KorAm Bank. "In line with this, we are concentrating our efforts on complementing the Internet banking system to meet the requirement for customers' convenience."

When the Internet banking service launches as scheduled in July, registered users will be allowed to access the banking service up to 19 banks at the same time with a digital wallet, a kind of electronic bankbook.

"If the Internet banking becomes available in Korea, a so-called cyber revolution will spread to the nation's entire financial sectors, boosting the overall electronic commerce." said a senior researcher of Korea Telecom.

It is believed that such a prompt payment method will improve the overall cash flow of local cyber shopping malls and online securities firms, which would be the biggest beneficiary of the projected Internet banking service, according to industry sources.