ScholarWorks@숙명여자대학교

초록

The advent of Internet-only banks in Korea was accompanied by a policy objective aimed at fostering innovation within the financial sector, particularly by Information and Communication Technology (ICT) companies. These entities were expected to assume a “catfish” role, propelling advancements and novelty within the financial industry. The Financial Services Commission has articulated that the establishment of Internet-only banks was driven by a multifaceted agenda, primarily centered on enhancing consumer financial experiences through innovation, promoting competitive dynamics within the banking sector, and catalyzing new growth engines for the future. This study examines the lending behavior of private financial institutions to low- and medium-credit borrowers during the initial settlement period of Internet-only banks, from 2017 to 2020. While a comprehensive analysis of the “catfish” effect would necessitate an examination of ICT infrastructure, the impact of new products, and the evolving business culture, these broader effects are challenging to isolate during the initial period. Consequently, the present study focuses on the medium- and low-credit loan market, a pivotal policy objective for Internet-only banks. The findings indicate that savings banks that had been active in lending to low- and medium-credit borrowers increased their lending rapidly in response to the introduction of Internet-only banks. Notably, these banks increased their lending to medium-credit borrowers at a faster rate compared to low-credit borrowers. Furthermore, our analysis reveals a substantial decline in credit spreads for low- and medium-credit borrowers, in terms of price (interest rates), from 2018 to 2019. These empirical findings suggest that Internet-only banks have contributed to the expansion of the lending market, thereby fulfilling some of the original objectives for their establishment. As the role of Internet-only banks in the market for medium- and low-credit loans becomes more apparent, their competitive impact on the broader banking industry is expected to increase. While some studies suggest that increased competition may destabilize the financial sector (e.g., Jimenez et al., 2013), others argue for a positive relationship with stability (e.g., Boyd & De Nicolo, 2005; Vives, 2018). This discrepancy underscores the necessity for additional research in this domain.

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