Rakuten, LINE Group get virtual banking licenses in Taiwan

Taiwan has issued its first virtual banking licenses to three firms, including subsidiaries of Japanese e-commerce giant Rakuten and the country's messaging giant LINE Group.

Specifically, the licenses have been awarded to LINE Financial Taiwan, Rakuten International Commercial Bank, and Next Commercial Bank, which is led by Taiwan telecom operator Chunghwa Telecom, Reuters reported Tuesday.

Taiwan's Financial Supervisory Commission granted these licenses, and the regulator does not plan to issue more virtual bank licenses currently, per the report.

Management consultancy McKinsey recently estimated that if low-cost digital-first banks can scale quickly and take "significant" market share from incumbents, Asian banks' return on equity or RoE could drop to 6.4% in 2023, from 10.1% last year.