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.

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