Thai Bank X venture nears launch as Korean lender expands into digital bank operations, technology exports Kim Dong-hyun, global business team lead at Kakao Bank, speaks during an interview with The Korea Herald in Pangyo, Gyeonggi Province, on June 2. (Lee Sang-sub/ The Korea Herald) Kakao Bank is preparing for its biggest overseas test yet.The launch of its Thai virtual bank venture, Bank X, marks a shift from investor to operator for Korea's largest internet-only bank.Unlike its previous overseas investments, Kakao Bank is taking responsibility for designing and developing the digital bank's mobile platform and services, making it the most hands-on role it has assumed in an overseas venture."We think the launch will probably take place late this year or early next year," said Kim Dong-hyun, head of Kakao Bank's Global Business Team, in an interview with The Korea Herald last week.Bank X, developed with Thailand's SCBX and WeBank Technology Services, was initially expected to launch within a year of receiving its virtual banking license in July 2025. The timeline now appears likely to slip slightly as discussions with regulators continue.For Kakao Bank, the project represents a step beyond simply investing overseas."In the second project, we wanted to expand our role and participate more in operations," Kim said. "We took charge of the front end of a digital bank: the mobile app and services."That approach reflects a broader overseas strategy. Rather than acquiring foreign banks or exporting a copy of its Korean business model, Kakao Bank is focusing on areas where its strengths in digital banking, user experience and credit assessment can add value."We thought it was not right to simply do what existing financial companies had done," Kim said.The strategy began to take shape after Kakao Bank's Kospi listing in 2021, when the lender concluded it had the capital and organizational capacity to expand abroad.Indonesia: More than investmentIndonesia became Kakao Bank's first major overseas foothold.In 2023, the lender acquired a 10 percent stake in Superbank, a digital bank backed by Grab, Singtel and Emtek Group. The investment has already delivered financial gains, with a 93.3 billion won ($59.8 million) valuation increase from Superbank's listing helping lift Kakao Bank's first-quarter net profit to a record 187.3 billion won.But the partnership is not only about investment returns.Kakao Bank also receives advisory and service-planning fees, providing an early test of whether its digital banking expertise can generate recurring revenue overseas."We are receiving advisory fees for the capabilities where we contribute differently, and discussing ways to convert some of that into licensing revenue related to technology and platforms," Kim said.Mongolia: Exporting know-howIn Mongolia, Kakao Bank is testing another piece of its model.The lender is in talks with MCS Group, one of Mongolia's largest conglomerates, regarding a potential investment in its digital banking subsidiary M Bank, and a separate credit-scoring project across the group's financial affiliates.The discussions began after MCS approached Kakao Bank for help in improving how borrowers' repayment capacity is assessed."The ability to assess repayment capacity with greater precision is what allows a lender to provide credit at more reasonable pricing," Kim said."We have know-how in credit assessment and modeling, and we want to apply that locally and build a better model together through testing."New overseas modelThailand, Indonesia and Mongolia each represent a different aspect of Kakao Bank's overseas strategy.In Thailand, it is helping build a digital bank. In Indonesia, it is monetizing operational expertise through partnerships. In Mongolia, it is exporting credit-scoring technology.Rather than pursuing large acquisitions, the lender is seeking opportunities where its capabilities can be turned into sustainable business.Kim said the cautious pace should not be mistaken for a lack of ambition."Going to another country, serving people there and dealing with that country's financial regulator all involve very difficult risks," he said."Approaching that carefully is not about holding back, but focusing on the areas where we can create success through partnerships." Kim Dong-hyun, Global Business Team lead at Kakao Bank, speaks during in an interview with The Korea Herald in Pangyo, Gyeonggi Province, on June 2. (Lee Sang-sub/ The Korea Herald)