DOUZONE prioritizes long-term stability over short-term volatility, withdraws from internet bank application

Korea's leading enterprise resource planning (ERP) corporation DOUZONE suddenly announced it would not participate in the application for preliminary approval for the fourth internet-only bank, causing its stock price to plummet into double digits.

DOUZONE explained that it has shifted its strategy to launch a new financial platform that can maximize the strengths of its existing business solutions rather than pursue new ventures that could lead to short-term volatility.

However, the industry interprets that DOUZONE, which faced difficulties in forming a consortium about a week before the application deadline for the preliminary approval of the fourth internet-only bank, may have given up.

As of the 17th, DOUZONE's stock price is trading at 58,900 won, over 11% lower than the previous trading day.

On the morning of that day, DOUZONE stated, “In the process of preparing for the application for preliminary approval for the internet-only bank, we have considered competition with existing banks and have been receiving consulting in various aspects such as strategy, finance, law, and information and communication technology (ICT), and have continuously reviewed and contemplated our business plan,” and added, “After careful consideration by the management, it was decided not to participate in the application for preliminary approval.”

It is known that there were internal concerns about the business viability in a situation where there are nearly 20 existing commercial banks and internet-only banks. Additionally, most of the consortiums expressing interest in the fourth internet-only bank have been offering specialized services for small and medium-sized enterprises and small businesses, like DOUZONE, making it difficult to differentiate.

DOUZONE has been conceptualizing models that showcase specialized loans for small and medium-sized enterprises and small businesses based on the data acquired through its ERP.

An industry official said, “While it is true that many tax and accounting firms employ DOUZONE's services, the challenge is that the data belongs to the businesses, making it difficult to obtain consent, and even if permission is granted, the data update cycle is relatively longer than the settlement of account cycle (mostly monthly), which seems to have hindered the formation of the consortium.”

DOUZONE emphasized that it will focus on building a 'financial platform' to maximize the strengths of its existing business solutions, which are growing steadily through the expansion of its AI service lineup. It also stated that the cooperation with Shinhan Bank will continue despite withdrawing from the application for preliminary approval for the internet-only bank.

A company official said, “DOUZONE has chosen long-term stability and innovation over short-term volatility through this strategic transition.”