Intense competition in Taiwan's banking sector expected next year: FSC chairman

With internet-only banks hitting the market, plural payment environments will be created

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Financial Supervisory Commission Chairman Wellington Koo

Financial Supervisory Commission Chairman Wellington Koo (CNA photo)

TAIPEI (Taiwan News) — Financial Supervisory Commission Chairman Wellington Koo (顧立雄) said on Tuesday (Nov. 26) that competition in the banking sector will grow more intense next year when internet-only banks hit the market, CNA reported.

Koo said the commission has amended the "Rules Governing the Administration of Electronic Payment Business" to promote electronic payments and establish interbank payment platforms. The amendment draft will be sent to the Legislative Yuan in February 2020, CNA reported.

With internet-only banks hitting the market at about the same time, plural payment environments will be created. This will create intense competition for traditional banks’ digital financial services, Koo added.

He went on to say that consumer finance will be particularly competitive, which is not the key profit driver for traditional banks. Therefore, they shouldn’t be too worried about losing ground.

Asked whether traditional banks’ short-term profits will be affected, Koo said that it depends on whether the technology of virtual channels can replace brick-and-mortar channels, according to CNA.

In related news, the transaction volume of mobile payments nationally reached NT$76.1 billion (US$2.5 billion) for the first nine months of the year, Koo said. He added that breaking NT$100 billion is bound to happen before the year-end.